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Farm    Accounting    and 
Business   Methods 


A  TEXT-BOOK  FOR  STUDENTS  IN  AGRI- 
CULTURE AND  A  MANUAL 
FOR  HOME-STUDY 


BY 
J.   A.   BEXELL,    A.M, 

DEAN  SCHOOL  OF  COMMERCE 
OREGON  AGRICULTURAL  COLLEGE 


The  Home  Correspondence  School 
Springfield,  Mass..  U.  S.  A- 

1911 


(JOPYUIGHT  1909 

By  J.   A.  BEXELL 


COFi'RIGHT  1911 

By  the  home  CORRESPONDENCE  SCHOOL 


M 


f 


/ 


^/ 


Ruled  Blank  Books 

with  printed  headings  for  use  in  writing  out  the  exercises,  or  for  practical 
use  on  the  farm,  may  be  obtained  from  stationers  generally  or  from  The 
Home  Correspondence  School,  Springfield,  Mass. 


Page 

7 


13 

titry 37 

56 

70 

PART  II.    Cost  Accounts  and  Special  Records, 

Chapter     VI.     Cost  of  Production 91 

Chapter   VII.     Special  Cost  Records 98 

PART  III.    Business  Organizations,  Correspondence,  and  Forms. 

Chapter  VIII.     Business  Organizations 115 

Chapter     IX.     The  Business  Letter 123 

Chapter       X.     Business  Forms 141 

PART  IV.    Useful  Tables 149 

Index 160 


359975 


CORRECTIONS  AND  SUGGESTIONS 

Note  to  the   Student  : —Make   all  corrections  and  read   suggestions 
before  beginning  work. 

Page  30.     Under  written  work,  after  the  word  "illustrations,"  add:   April  1, 

Cash  on  hand.  $170.00. 
••    34.     Line   4,  Surrey,  should  be    $165.00  (not  $1.30.00);    Light  Buggy, 

$85.00  (not  $50.00). 
"    47  and  48.     The  illustrations  should  be  dated  1910. 
"     48.     Total  Stock,  in  illustration,  should  be  $4421.77  ;  Profit,  $452.74. 
"    50.     The  "Net  Worth  last  Year"  for  both  Statements  No.  3  and  4  is 

taken  from  the  Net  Worth  in  Statement  No.  2. 
"    53.     March  30,  strike  "  Personal  column." 

"    55.     Third  line.     The  Productive  Investment  is  $6,265.54  (not  $6,265.64). 
"    59.    April  17,  Laundry  95  cents  (not  97  cents). 
"    63.     March  1,  Tea  (not  Codfish)  35  cents. 
"    80.     June  18,  250  (not  25)  bu.  Corn  @  74  cents. 
"    80.     June  22    10  tons  Timothy  @  $15.50  (not  $15.00). 
"    80.     June  23,  Collection  and  Exchange  $3.50  (not  $3.40). 
"     83.     Paragraph  3,  third  line,  June  1  (not  July  1). 
"    85.     The  Corn  Inventory  is  too  large  by  525  bushels,  if  you  deduct  the 

sales  from  the  purchases,  but  the  748  bushels  should  be  used  to  get 

the  results  given  on  pages  82  and  86. 

The  Net  Gain,  with  the  given  inventories,   for  each  partner  is  $29.75. 
"    86.     Richard  (not  Robert)  Morris,  Henry  Simmons,  and  Western  Produce 

Co.  should  be  placed  in  the  left  column,  (Resources). 


By  J.   A.   BEXELL 


COP^TIIGHT  1911 

By  the  home  correspondence  school 


l^j" 


Ruled  Blank  Books 

with  printed  headings  for  use  in  writing  out  the  exercises,  or  for  practical 
use  on  the  farm,  may  be  obtained  from  stationers  generally  or  from  The 
Home  Correspondence  School,  Springfield,  Mass. 


TABLE  OF  CONTENTS 


Page 

Chapter       I.       Introductory 7 

PART  I.    Financial  Accounts. 

Chapter      II.     First  Method— Single  Entry 13 

Chapter     III.     Second  Method— Modified  Double  Entry 37 

Chapter     IV.     Household  Accounts 56 

Chapter       V.     Third  Method— Full  Double  Entry 70 

PART  II.    Cost  Accounts  and  Special  Records. 

Chapter     VI.     Cost  of  Production 91 

Chapter   VII.     Special  Cost  Records 98 

PART  III.    Business  Organizations,  Correspondence,  and  Forms. 

Chapter  VIII.     Business  Organizations 115 

Chapter     IX.     The  Business  Letter 123 

Chapter       X.     Business  Forms 141 

PART  IV.    Useful  Tables 149 

Index 160 


3599T3 


PREFACE    TO    THE    FIRST    EDITION 

There  are  a  number  of  works  on  Farm  Accounts  now  on 
the  market,  but  I  have  found  none  adapted  to  the  class  room. 
An  arithmetic  would  be  useless  as  a  text  without  problems  for 
solution;  a  text  on  Farm  Records  is  likewise  useless  in  the 
class  room  without  exercises  for  practice. 

My  aim  has  been  to  make  the  exercises  as  practical  and 
simple  as  possible,  but  no  attempt  has  been  made  to  limit  the 
illustrations  to  actual  experience  on  any  particular  farm. 
Hence,  both  prices  and  results  will  probably  vary  considerably 
from  actual  practice,  a  fact  which  will  not  reduce  their  illus- 
trative value.  The  forms  suggested  contain  many  new  and 
labor-saving  features,  conforming  with  the  best  modern  busi- 
ness practice.  A  resourceful  teacher  will  be  able  to  supple- 
ment the  exercises  to  any  extent  to  suit  the  time  available 
and  the  needs  of  his  class. 

The  increasing  interest  shown  in  this  subject  warrants  the 
belief  that  it  will  be  introduced  into  the  public  schools  in  the 
near  future,  and  surely  there  is  no  subject  more  worthy  of 
attention  or  more  sadly  neglected.  Suggestions  and  criticisms 
from  farmers  and  teachers  interested  in  the  subject  will  re- 
ceive careful  consideration  in  a  future  edition. 

J.  A.  Bexell. 

Oregon  Agricultural  College 
October  1,  1909 


PREFACE    TO    THE    SECOND    EDITION 

A  large  number  of  inquiries  from  schools  of  all  grades  have 
confirmed  my  conviction  that  there  is  a  growing  demand  for 
a  text-book  in  Farm  Accounts.  Such  a  text-book  must  be 
teachable.  Without  a  well  graded  set  of  exercises  to  place 
before  the  student  it  would  be  as  useless  in  the  class  room  as 
an  arithmetic  without  problems.  Many  new  exercises  have 
been  suggested  by  readers  of  the  first  edition  and  it  is  believed 
that  the  present  volume  offers  a  fairly  satisfactory  course. 
Ruled  and  printed  forms  have  been  provided  for  the  exercises 
in  bookkeeping  and  these  forms  are  also  suitable  for  actual 
bookkeeping  on  the  farm.  Chapters  have  been  added  on 
Business  Forms,  Business  Correspondence,  and  Business  Or- 
ganizations— subjects  of  the  utmost  importance  to  every 
student;  and  it  is  hoped  that  the  added  chapters  will  make 
the  book  more  valuable  as  a  business  manual. 

The  fundamental  principles  of  accounting  being  the  same 
in  every  business,  it  has  been  found  that  the  exercises  are 
equally  adapted  to  classes  in  Mechanic  Arts,  Domestic  Econ- 
omy, etc.,  so  that  the  special  exercises  for  this  class  of  students 
have  been  omitted. 

A  syllabus  of  instruction  sheets  has  been  prepared  for  stu- 
dents who  desire  to  pursue  the  study  at  home,  which  is  also 
available  to  schools  giving  correspondence  courses. 

I  take  this  opportunity  of  thanking  all  who  have  contributed 
in  any  way  toward  the  improvement  of  this  effort  to  help  the 
farmer.  Special  acknowledgment  is  due  Mr.  E.  B.  Moore 
for  his  excellent  chapter  on  "The  Business  Letter." 

J.  A.  Bexell. 

Oregon  Agricultural  College 
October  1,  1910 


FARM  ACCOUNTING  AND  BUSINESS  METHODS 


CHAPTER   I 

INTRODUCTORY 

It  is  a  truism  to  say  that  the  financial  side  of  farming  is 
of  the  utmost  importance.  But  the  fact  remains  that  this  side 
of  the  world's  greatest  industry  is  almost  entirely  neglected 
by  both  the  farmer  and  the  schools.  Professor  Bailey  says  on 
this  subject:  "In  visiting  practically  every  farm  in  one  of 
the  counties  of  the  state  (N.  Y.)  we  did  not  find  one  man  who 
knew  how  much  it  cost  him  to  produce  milk  or  to  raise  any 
of  his  crops." 

Prosperity  of  the  Farmer 

The  Secretary  of  Agriculture,  in  recent  Year  Books,  points 
out  the  remarkable  prosperity  of  the  farmer;  that  the  export 
of  farm  products  is  vastly  in  excess  of  all  other  exports  com- 
bined; that  a  million  agricultural  debtors  have  been  trans- 
formed during  the  last  ten  years  into  the  same  number  of 
surplus  depositors;  that  "contrary  to  his  reputation,  the 
farmer  is  a  great  organizer,  and  he  has  achieved  remarkable 
and  enormous  successes  in  many  lines  of  economic  co-operation 
in  which  the  people  of  other  occupations  have  either  made 
no  beginning  at  all  or  have  nearly,  if  not  completely,  failed." 
He  points  out  that  most  farmers  live  better  than  the  average 
merchant  or  mechanic. 

Causes  of  Success 

It  is  doubtless  true  that  the  farmer  is  becoming  a  factor 
to  be  reckoned  with  in  the  business  world;  that  the  average 
farmer  knows  vastly  more  about  scientific  farming  than  his 
father  did;  he  understands  more  thoroughly  the  value  of 
proper  cultivation,  of  fertilization,  of  rotation  of  crops,  and 
of  diversified  farming;  but  it  cannot  be  said  that  he  owes 

(7) 


8  FAllM   ACCOUNTINCx 

his  success  to  improved  business  methods.  H^  has  been  suc- 
cessful, rather  in  spite  of  his  ignorance  in  this  respect,  and 
because  of  the  lavish  generosity  of  mother  nature. 

Tm^o  Phases  of    Farming 

The  business  of  farming  assumes  two  distinct  phases:  the 
productive  phase  and  the  exchange  phase.  The  one  aims  to 
extract  the  treasures  from  the  soil;  the  other,  to  place  them 
in  the  hands  of  the  consumer.  It  is  important  not  only  to  raise 
abundant  crops,  but  also  to  sell  the  products  to  advantage. 

Importance  of  the  Exchani^e  Phase 

The  importance  of  the  exchange  phase  is  often  lost  sight  of. 
A  farm  may  be  forced  to  yield  to  its  maximum  capacity,  labor 
may  be  managed  properly  and  waste  reduced  to  a  minimum; 
and  yet  the  net  result  may  be  a  loss  at  the  end  of  the  year. 
As  a  general  economic  proposition,  it  might  be  said  that  large 
crops  often  result  in  serious  loss  to  society  as  a  whole.  If  the 
net  value  to  the  consumer  is  less  than  the  labor  and  capital 
expended  on  the  crop,  society  is  the  loser  by  the  difference. 
Hence  the  importance  of  a  thorough  understanding  by  the 
farmer,  as  well  as  by  the  merchant  and  manufacturer,  of  the 
laws  and  methods  of  exchange  or  commerce. 

Farming  a  Paying  Business 

That  farming  is  a  science  has  been  emphasized  so  much  that 
the  fact  that  it  is  also  a  business  is  often  lost  sight  of.  It  is 
a  real  business,  and  one  which  pays  the  United  States  close  to 
eight  billion  dollars  annually.  It  has  been  demonstrated  re- 
peatedly that  no  legitimate  business  pays  better  than  farming. 
It  may  be  a  little  more  uphill  work  at  the  start,  since  most 
farmers  begin  business  with  small  capital,  but  it  is  incompar- 
ably safer  in  the  long  run,  and  will  insure  a  competence  for  old 
age  with  greater  certainty  than  any  other  occupation.  But  let 
it  ever  be  borne  in  mind  that  the  condition  for  success  is  that 
farming  must  be  conducted  on  business  principles. 

Importance  of  Keeping  Accounts 

Accurate  records  and  accounts  are  absolutely  necessary  in 
the  management  of  every  business  enterprise,  great  or  small. 


INTRODUCTORY  9 

No  business  can  be  successful  in  the  long  run  unless  its  con- 
dition can  be  determined  at  any  time,  and  no  conservative 
business  man  will  fail  to  prepare  a  financial  statement  at  the 
end  of  his  fiscal  year.  He  must  determine  how  he  stands,  not 
only  with  others,  but  with  himself. 

One  object  of  keeping  accounts  is  to  assist  in  accumulating 
property.  Another  important  object  is  to  record  a  continuous 
history  of  business  transactions  for  future  guidance.  Not 
only  is  this  profitable,  but  it  is  a  source  of  real  pleasure  and 
satisfaction  to  know  our  standing  with  those  with  whom  we 
deal  as  well  as  the  profits  and  losses  in  our  business  enter- 
prises. 

What  the  Records  Should  Show 

A  complete  system  of  farm  records  should  enable  the  farmer 
to  tell  at  any  time  how  his  business  stands  with  himself  and 
others;  the  cost  of  production  of  staple  crops  and  live  stock, 
and  the  periodical  results  of  both  the  productive  and  the  ex- 
change phase  of  his  operations.  The  records  should  also  show 
personal  and  household  expenses,  and  finally  a  comprehensive 
history  of  the  various  phases  of  the  enterprise,  including  plots 
of  crop  rotation,  fertilizing,  etc. 

Difficulties  of  Farm  Bookkeeping 

Numerous  systems  of  farm  bookkeeping  have  been  proposed, 
but  the  trouble  with  them  all  is  that  they  are  either  too  com- 
plicated or  altogether  unpractical.  Professor  Bailey  says: 
"The  entire  subject  of  farm  accounting  must  be  attacked  in 
a  new  way.  The  ordinary  bookkeeping  will  not  apply."  The 
reason  is  obvious.  Farming  is  a  much  more  complicated  busi- 
ness than  most  people  suppose.  A  farmer  is  both  a  producer 
and  a  dealer.  He  needs  financial  records  as  complete  as  those 
of  the  average  merchant  and  cost  recortls  as  accurate  as 
the  manufacturer's.  But  the  records  must  be  adapted  to 
the  business  in  hand.  The  farmer  is  usually  a  very  busy 
man.  His  chief  difficulty  is  neither  ignorance  nor  indolence. 
He  has  little  time  for  fancy  bookkeeping  and  still  less  for  "red 
tape."  What  he  wants  is  a  plain,  simple,  straightforward 
history  of  his  business,  so  arranged  and  classified  as  to 
require  the  minimum  effort  to  keep  it  up.     It  may  be  inter- 


10 


FARM    ACCOUNTING 


esting'  for  his  children  to  learn  the  conventional  use  of  red  ink, 
ruling's,  closing  of  books,  the  intricacies  of  journalizing,  etc., 
but  all  this  is  not  necessary  to  a  proper  understanding  of  farm 
bookkeeping. 

Methods  of  Bookkeeping 

In  the  following  pages  I  suggest  three  methods  of  farm 
bookkeeping  whereby  the  yearly  profit  or  loss  may  be 
determined  and  compared  from  year  to  year.  The  first  is  ex- 
tremely simple  Single  Entry;  the  second  method  is  a  com- 
prehensive, but  very  simple.  Modified  Double  Entry,  by  which 
the  financial  standing,  the  cost  of  production,  profits  and 
losses,  etc.,  can  be  ascertained  at  any  time;  the  third  is  a 
system  of  complete  Double  Entry,  generally  used  in  enter- 
prises doing  an  extensive  credit  business.  Any  farmer  with 
average  intelligence  will  be  able  to  master  either  method  with 
small  expenditure  of  time  and  labor. 


PART  I 

FINANCIAL   ACCOUNTS 


First  Method 

Being  the  simplest  form  of  single  entry,  employing  only  one 
book,  which  may  be  purchased  anywhere.      (See  page  10.) 


FINANCIAL   ACCOUNTS 

CHAPTER   II 

SINGLE   ENTRY,    THE    SINGLE-BOOK    SYSTEM 

The  Day  Book 

The  most  important  record  in  this  method  of  bookkeeping 
is  the  Day  Book,  or  what  might  properly  be  called  the  History 
of  the  Farm.  This  should  be  written  in  the  form  of  a  diary, 
without  attempting  a  close  classification  of  the  entries.  Al- 
ways bear  in  mind,  however,  that  it  is  safer  to  give  too  much 
rather  than  too  little  information  in  the  records.  The  Day 
Book  should  contain  any  memoranda  which  might  prove  valu- 
able for  future  reference.  Conditions  of  the  weather,  time  of 
planting,  breeding,  division  of  fields,  sales,  purchases,  loans, 
attendance  at  conventions,  valuable  recipes,  etc.,  are  proper 
subjects  for  entry.  Though  it  is  advisable  to  keep  the  book  as 
neat  as  possible,  it  is  unnecessary  to  spend  much  time  for  that 
purpose.  It  is  more  convenient  to  jot  down  items  in  lead  pen- 
cil as  they  come  along,  and  then,  as  time  allows,  classify  them 
under  their  respective  heads. 

The  Day  Book  and    Cash   Book  Combined 

In  the  form  on  page  19,  the  Day  Book  and  Cash  Book  are 
combined.  The  ruling  is  that  of  an  ordinary  stock  Day  Book. 
In  the  left-hand  column  are  entered  all  sums  received  and  in  the 
right-hand  column  all  payments. 

While  the  combined  Day  Book  and  Cash  Book  has  the  advan- 
tage of  extreme  simplicity,  it  is  often  more  satisfactory  to 
devote  a  part  of  the  Day  Book,  or  a  separate  book,  exclusively 
to  cash  transactions.  Where  this  plan  is  followed,  it  is  un- 
necessary to  record  all  the  cash  items  in  the  Day  Book.  The 
left-hand  page  is  used  for  cash  receipts  and  the  opposite  p^ge 
for  payments. 

(13) 


14  FARM    ACCOUNTING 

Bill  and  Receipt  File 

A  very  important  part  of  the  farm  records  is  the  Bill  and 
Receipt  File.  A  part  of  the  Day  Book  can  be  devoted  to  that 
purpose,  but  it  is  better  to  provide  a  separate  book.  In  it 
should  be  securely  pasted  all  bills  for  machinery,  implements, 
tools,  live  stocky  nursery  stock,  furniture,  etc.,  which  will  be 
subject  to  inventory,  but  not  bills  for  supplies,  feed,  table  ex- 
penses, etc. ;  also  receipts  for  the  payment  of  money,  canceled 
notes,  certificates  of  pedigree,  important  clippings  from  peri- 
odicals, and  any  other  matter  of  interest.  This  will  prove  an 
invaluable  record  for  future  guidance.  (See  illustration,  page 
24.)     Many  prefer  the  Pocket  File,  illustrated  on  page  16. 

The  Inventory 

The  inventory  may  be  considered  the  foundation  of  the  farm 
records,  because  without  it  no  results  at  all  can  be  obtained. 
It  should  be  taken  at  such  a  time  as  will  give  the  most  accurate 
results  with  the  least  expenditure  of  labor.  This  differs 
widely  in  different  localities.  January  1st  seems  the  most 
natural  beginning  of  the  fiscal  year,  but  the  objection  is  that 
at  this  time  there  is  apt  to  be  a  large  quantity  of  feed  and 
supplies  on  hand.  April  1st  would  be  a  better  date  so  far  as 
the  stock  on  hand  is  concerned,  but  inconvenient  in  many 
localities  on  account  of  the  pressure  of  spring  work.  When- 
ever it  is  taken,  it  should  be  accurate.  No  guesswork  should 
be  tolerated.  Weigh  and  count ;  do  not  estimate.  Then  assign 
the  actual  market  value  to  the  property,  taking  due  account 
of  depreciation. 

Depreciation 

Neither  an  old  wagon  nor  an  old  horse  is  worth  as  much  as 
new  ones.  The  same  holds  true  with  very  few  exceptions  of 
all  equipment,  animals,  houses,  and  improvements.  The  ques- 
tion as  to  what  rate  shall  be  charged  off  annually,  so  as  to 
create  a  sinking  fund  with  which  to  renew  the  depletion,  has 
been  an  open  question  with  accountants  since  time  immemorial. 
It  is  particularly  difficult  to  determine  the  depreciation  of 
live  stock,  work  horses,  and  depletion  of  the  fertility  of  the 
soil.     Without  entering  into  a  discussion  of  the   subject,  I 


SINGLE   ENTRY  15 

give  below  the  experience  and  opinion  of  the  best  authorities 
on  the  subject.  The  thoughtful  farmer  will  find  no  difficulty 
in  adjusting  these  rates  to  suit  his  conditions.  For  the  pur- 
pose of  general  estimates,  the  following  rates  on  the  cost  or 
market  value  are  fairly  accurate: — 

Buildings  (including  insurance  and  repairs) ....   5  per  cent. 

Horses,  above  5  years 10  per  cent. 

Milch  cows  (after  3d  year) 8  per  cent. 

Machinery  and  tools 10  per  cent. 

HoMT  to  Determine  the  Profits 

The  all-important  question  at  the  end  of  each  year  is :  Has 
the  work  for  the  year  been  a  financial  success  or  failure?  To 
determine  the  profits  or  losses  is,  therefore,  a  problem  to  be 
solved  each  year.  As  a  matter  of  fact,  it  is  a  very  simple 
problem,  and  it  becomes  easier  the  oftener  it  is  done. 

Let  us  assume  that  heretofore  you  have  kept  no  books  what- 
ever, but  you  have  now  decided  to  make  a  start.  You  have 
procured  a  simple,  substantial  Day  Book  (may  be  purchased  at 
any  stationery  or  drug  store)  and,  after  listing  all  your  prop-' 
erty,  you  are  prepared  to  make  the  entries  shown  in  the 
illustration.  April  1st  is  selected  as  the  beginning  of  the 
fiscal  year,  because  on  that  date  the  supplies,  grain,  feed,  etc., 
are  usually  low,  and  the  average  farmer  has  considerable  time 
to  spare.  Of  course,  this  varies  in  different  localities,  and  any 
other  date  may  be  adopted  to  suit  the  farmer's  convenience. 
The  proper  opening  entries,  including  the  inventory,  are 
shown  on  page  18. 

A  Year  Later 

At  the  end  of  the  year  we  are  ready  to  determine  the  result 
of  the  year's  work.  If  we  have  kept  only  memoranda  in  the 
Day  Book,  the  best  we  can  do  is  to  take  another  inventory 
exactly  similar  to  the  last  one.  It  is  evident  that  the  differ- 
ence between  what  we  are  worth  now  and  our  net  worth  last 
year  will  be  the  net  gain.  The  second  financial  statement  and 
the  statement  of  Profit  and  Loss  are  illustrated  on  page  20. 


16 


FARM    ACCOUNTING 


Net  KariiingH 

The  net  profit  shown  in  the  illustration,  page  20,  includes 
the  interest  on  the  investment  and  the  wages  of  the  members 
of  the  family.  To  find  the  net  earnings  of  the  proprietor,  the 
value  of  the  household  goods,  life  insurance,  cash,  and  the 
cost  of  the  dwelling  should  be  deducted  from  the  last  year's 
inventory.  Then  find  the  interest  on  the  remainder  at  a  fair 
rate;  this  deducted  from  the  profit  gives  the  earnings  of  the 
family.  It  can  be  apportioned  in  any  way  the  proprietor  sees 
fit.  This  is  illustrated  further  in  Lesson  11.  If  members  of 
the  family,  engaged  in  productive  work,  receive  regular  pay 
before  the  statement  is  made,  the  final  result  is  the  net  profit 
above  wages  and  interest.  The  question  might  be  asked :  why 
deduct  the  value  of  the  dwelling  before  the  interest  is  taken? 
The  reason  is  that  the  dwelling  is  not  a  productive  investment. 
It  is  apt  to  be  more  or  less  valuable  than  the  average  standard, 
according  to  the  taste  and  ability  of  the  owner.  Amounts 
drawn  for  personal  use  should,  of  course,  be  added  to  the  net 
earnings. 


ALPHABETICAL   BILL  FILE 


SINGLE    ENTRY 


17 


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18 


FARM    ACCOUNTING 


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OPENING  ENTRY  AND  INVENTORY 


SINGLE   ENTRY 


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SINGLE   ENTRY  21 

Personal  Accounts 

A  farmer  frequently  retails  his  products  to  his  neighbors  or 
to  townspeople,  if  he  lives  near  town.  In  such  cases  it  often 
happens  that  he  can  sell  to  better  advantage  by  running  an 
account  with  steady  customers,  collecting  by  the  week  or 
month.  If  this  phase  of  the  business  is  extensive,  as  is  the 
case  in  truck  farming,  dairy,  poultry,  and  the  like,  it  would 
pay  the  farmer  to  provide  tickets  or  coupons  and  sell  five  or  ten 
dollars'  worth  in  advance  even  at  a  small  discount.  But  gen- 
erally an  account  with  each  customer,  kept  either  in  a  separate 
book  or  in  part  of  the  Day  Book,  will  be  found  satisfactory. 
However,  most  farmers  sell  their  products  for  cash,  or  ex- 
change for  merchandise,  which  is  equivalent  to  cash  sales. 
It  is,  therefore,  unnecessary  to  enter  into  an  elaborate  dis- 
cussion of  keeping  such  accounts. 

Some  farmers,  very  unwisely,  attend  to  the  personal  busi- 
ness of  their  hired  help,  even  to  the  extent  of  buying  their 
smoking  tobacco.  There  is  absolutely  no  excuse  for  such  a 
practice.  Rather  pay  your  help  in  installments  and  let  them 
settle  their  own  bills. 

Accounts  with  persons  we  owe  are  generally  unnecessary. 
Most  merchants  furnish  either  a  pass  book  in  which  the  ac- 
count is  shown  in  detail,  or  an  itemized  bill  is  furnished  with 
each  purchase.  These  bills  should  be  pasted  or  filed  in  the 
Bill  File  and  checked  off  when  paid.  In  the  great  majority  of 
cases  this  will  prove  more  satisfactory  than  ledger  accounts. 

A  special  ledger  can  be  provided,  or  separate  pages  of  the 
Day  Book  devoted  to  special  accounts.  This  classification  is 
made  either  daily,  weekly,  or  mcfnthly,  as  time  and  circum- 
stances-allow. 


22 


FARM    ACCOUNTING 


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SINGLE  ENTRY 


23 


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BILL  AND  RECEIPT  FILE 

See  also  p.  16 


SINGLE   ENTRY  25 

Continued  Inventory 

The  illustration  on  page  17  shows  a  very  convenient  form 
of  a  continued  inventory.  The  items  are  written  only  once 
in  as  many  years  as  there  are  money  columns.  Besides  sav- 
ing space  and  labor,  it  avoids  the  possibility  of  omitting  im- 
portant items,  if  the  first  list  of  items  is  correct.  The  prices 
will  also  be  more  accurate,  since  they  may  be  easily  compared 
from  year  to  year.  Two  or  three  blank  lines  should  be  left 
under  each  heading  for  new  items  which  may  appear  in  the 
next  inventory.  The  ordinary  trial  balance  book,  for  sale  at 
any  stationery  store,  is  a  good  form,  or  additional  columns 
may  be  ruled  in  the  Day  Book  or  Journal. 

Banking 

The  enormous  increase  in  bank  deposits  in  rural  communi- 
ties is  the  best  evidence  that  the  farmer  is  beginning  to 
appreciate  the  value  of  better  system  in  his  finances.  It  is 
claimed  that  fully  ninety-five  per  cent,  of  the  country's  busi- 
ness is  done  by  credit  currency,  such  as  checks,  drafts, 
money  orders,  notes,  and  the  like.  Many  good  business  men 
keep  only  their  bank  book,  and  this  is  far  more  satisfactory 
than  no  bookkeeping  at  all,  especially  if  bills  and  receipts  are 
filed  for  reference.  The  bank  account  may  be  carried  entirely 
independent  of  all  other  records. 

Banking  carries  with  it  many  advantages.  Important 
among  them  are : — 

1.  The  depositor's  credit  and  influence  are  measured 
largely  by  the  size  and  regularity  of  his  bank  account. 

2.  A  tendency  to  economize  by  a  desire  to  increase  the 
bank  balance. 

3.  The  banker  becomes  your  bookkeeper  and  business 
counselor. 

4.  Security  against  fire  and  robbers. 

5.  Indorsed  checks  are  both  records  and  receipts  of  pay- 
ments. 

6.  A  benefit  to  the  community  by  keeping  the  money  in 
circulation. 

7.  Convenience  in  making  change. 


26 


FARM    ACCOUNTING 


BANK  ACCOUNT 


SINGLE   ENTRY  27 

8.  The  bank  will  always  loan  to  a  good  depositor  in  pref- 
erence to  one  who  is  not  a  depositor. 

There  are  only  two  operations  in  banking  which  need  dis- 
cussion here — depositing  and  checking.  The  banker  will  give 
all  necessary  directions  regarding  both,  except  as  to  keeping 
the  individual  account.  This  is  illustrated  on  page  26,  and 
will  be  thoroughly  understood  after  Lesson  5  has  been 
worked  out.  The  special  column  Cash  Book,  pages  44  and  45, 
is  an  excellent  form  for  keeping  the  bank  account.  If  all 
cash  is  deposited  and  all  payments  made  by  check,  the  dif- 
ference between  the  total  columns  represents  the  bank  bal- 
ance. As  to  deposits,  it  is  preferable  to  deposit  all  cash,  and 
then  draw  out  for  personal  use  as  needed. 

The  method  of  handling  checks  is  as  follows:  Record  the 
payee,  number,  and  amount,  as  illustrated  under  Cash  Re- 
ceipts, page  44.  The  checks  are  satisfactory  receipts,  but  the 
itemized  bills  should  be  pasted  in  the  Bill  File  and  bear  the 
same  number  as  the  checks.  The  bank  will  usually  furnish 
all  necessary  stationery  free  of  charge.  The  bank  balance  is 
considered  a  part  of  the  cash  on  hand,  so  that  no  special 
account  except  the  check  stubs  and  pass  book  need  be  kept 
with  the  bank.  The  bank  balance  is  proved  each  month  as 
follows :  Arrange  the  checks  returned  numerically.  List  the 
checks  not  returned;  add  the  outstanding  checks  to  the  bal- 
ance shown  in  the  check  register;  the  sum  should  agree  with 
the  balance  in  the  pass  book.  It  is  often  convenient  to  keep 
a  special  check  register.  Following  is  a  convenient  form, 
showing  the  method  of  proving  the  balance  at  the  bottom  of 
the  page. 


28  FARM    ACCOUNTING 


A  WORD  TO  THE  READER 


The  real  aim  of  this  book  is  to  improve  the  business  methods 
on  the  farm  which  the  reader  owns  now  or  expects  to  own  in 
the  future.  Merely  reading  the  book  will,  doubtless,  create  a 
vague  conviction  that  the  subject  is  important,  but  it  adds  but 
little  to  the  reader's  knowledge  of  accounting  and  correct  busi- 
ness method.  This  is  accomplished  only  by  working  out 
problems  typical  of  the  actual  experience  of  the  average 
farmer.  In  the  process  of  such  exercises  the  conviction  will 
become  strong  that  the  business  phase  is  of  such  importance 
that  no  farmer  who  aspires  to  success  can  afford  to  neglect 
it.  It  is  suggested  that  a  systematic  study  of  the  Illustrative 
Lessons  be  taken  up  in  each  family,  especially  where  there 
are  boys  and  girls  advanced  far  enough  to  profit  by  the  study, 
and  that  actual  accounts  of  the  home  be  started  wherever  it  is 
practicable.  For  instance,  it  will  "be  found  exceedingly  inter- 
esting for  the  boys  to  take  an  actual  inventory  of  the  home- 
stead after  having  worked  out  Lesson  1,  and  the  girls  will  find 
Lessons  12  and  13  especially  helpful  and  interesting.  It  will 
be  found  that  each  lesson  will  contain  suggestions  which  will 
prove  valuable  to  every  reader,  whether  he  is  engaged  in  farm- 
ing or  in  any  other  occupation. 

It  is  an  excellent  practice  for  farmers  to  come  together 
occasionally  to  exchange  views  on  any  subject  pertaining  to 
their  common  interests.  Why  not  organize  a  Farmers'  Com- 
mercial Club  and  enjoy  good  fellowship  as  well  as  the  benefit 
of  each  other's  experience?  One  important  number  of  the 
permanent  program  could  be  a  discussion  of  business  methods. 
A  leader  should  be  appointed  to  conduct  a  regular  class  for 
several  weeks.  An  outline  for  such  a  course  is  found  on  page 
161.  The  publishers  will  be  glad  to  furnish  the  necessary 
material  for  working  out  the  exercises  or  for  practical  use  on  the 
farm. 


SINGLE   ENTRY  29 

Illustrative   Lessons 

LESSON  1 
THE   INVENTORY 

I.  General  Instructions. 

In  preparing  these  lessons,  the  student  should  use  great 
care  as  to  neatness  and  form.  It  is  not  necessary  to  use  the 
printed  forms  provided  for  the  purpose,  but  better  work  will 
be  done  with  good  stationery.  All  the  work  should  be  done 
with  ink,  if  practicable.  Do  not  pass  by  anything  that  is  not 
clearly  understood.  Ask  questions.  The  amounts  given  are 
totals  in  all  the  lessons,  unless  the  word  "at"  precedes  the 
price.     Hand  in  each  lesson  when  completed  for  approval. 

II.  Written  Work. 

1.  Use  three-column  Journal  paper  found  in  your  account 
book.     This  lesson  is  illustrated  on  page  18. 

2.  Write  at  the  top  of  page  1  of  your  Day  Book:  Mon- 
day, April  1,  1908.  Then  copy  the  following  opening  state- 
ment.    All  work  must  be  done  neatly  in  ink. 

Opening   Statement 

Six  years  ago  to-day  I  purchased  my  present  farm,  investing 
cash,  $6,000.  Below  is  an  accurate  inventory  of  all  my  prop- 
erty, and  a  statement  of  my  affairs  as  they  stand  to-day. 

3.  Skip  one  line,  then  arrange  the  following  statement  of 
Resources  and  Liabilities  exactly  as  illustrated  on  page  18. 

Inventory,  April    1,  1908 

Resources :  Farm,  160  A.,  market  value,  $8,000.  Produce : 
200  bu.  Corn  @  50c. ;  150  bu,  Oats  @  45c. ;  200  bu.  Wheat  @ 
85c. ;  20  tons  Hay  @  $6.00 ;  Potatoes  and  Vegetables,  $50.00. 
Stock:  6  Horses,  average  $100.00;  20  Cows,  average  $40.00; 
11  Steers,  average  $12.00;  5  Heifers,  average  $11.00;  12  Hogs, 
average  $6.00;  100  Sheep,  average  $3.00.  Poultry:  150 
Chickens  @  45c. ;  21  Turkeys  @  75c.  Implements :  1  Binder, 
$125.00;  2  Plows  @  $10.00;  2  Harrows  @  $12.50;  1  Mower, 
$40.00;  1  Hay  Rake,  $15.00;  1  Grain  Drill,  $50.00;  2  Wagons, 
together,  $110.00;  2  Sets  Harness,  together,  $90.00;  1  Buggy, 
$100.00;  Tools,  $50.00.     Supplies,  $25.00.     Household  Goods, 


30  '  FARM    ACCOUNTING 

$350.00.  Life  Insurance  (paid-up  value),  $964.36.  Cash, 
$170.00. 

Liabilities:  Labor  (unpaid),  $75.00.  Accounts  Payable, 
$125.15.     Mortgage,  favor  Iowa  Trust  Co.,  $3,000.00. 

Your  work,  if  correct,  will  be  exactly  as  shown  on  page  18, 
except  that  you  will  fill  in  the  omitted  part  of  the  illustration. 


LESSON  2 
DAY   BOOK   AND   CASH   BOOK 

I.  General  Instructions. 

Use  three-column  Journal  paper.  This  lesson  is  illustrated 
on  page  19.  The  Day  Book  should  contain  a  complete  history 
of  the  business.  Here  the  cash  account  is  carried  in  the  two 
money  columns.  It  is  often  convenient  to  carry  this  account 
on  special  pages. 

II.  Written  Work. 

Copy  the  following  entries  in  the  Day  Book  on  the  next  page 
after  the  last  statement.  Head  the  pages  and  columns  the 
same  as  in  the  illustration.   f\^f.  i^    Gt*^  o*^   U^t^A  ,5t  l70.6^^ 

(1)  Heavy  rain  storm.     Shod  ''Cap"  and  "Maud"  at  Scow- 

scroft's ;  paid  $3.00.     Bought  2  tons  of  Coal  @  $4.00 
per  ton. 

(2)  [Skip  a  line  between  each  date.]     Attended  Breeders' 

Convention  at  Portland.     Program  and  report  on 
file.     Paid  expenses,  $8.40. 

(3)  Paid  Grocery  bill  at  Murdock's,  $11.40. 

(4)  Bought  Milch  Cow  of  J.  C.  Smith ;  paid  cash,  $40.00. 

Attended   concert   of   the  Boston  Jubilee    Singers, 
with  family;  paid  expenses,  $2.00. 

(5)  Sold   one  Calf  to   P.   A.   Anderson   for  cash,   $7.00. 

Bought  1  pr.  Gloves,  $1.50. 

(6)  Bought  at  La  Fount's  for  cash:     1  Ax,  $1.00;  1  Ham- 

mer, 45c. ;  Nails,  50c.     Went  to  Portland  to  select 
farm  implements;  expense,  $3.00. 

(7)  Attended    church    with    family.      Dr.    E.    Hamilton 

preached  on  "Civic  Honor."     Collection,  25c. 


SINGLE   ENTRY  34 

(9)  Bought  Shoes  for  Teddie,  $2.00. 

(10)  Bought  5  bu.  Tested  Seed  Corn  @  $2.00  per  bu. 

(11)  Rain  all  day.     Fannie  dropped  calf. 

(12)  Sold  3-year-old  Horse,  "Cap,"  for  $125.00. 

(13)  Bought  one  Studebaker  Top  Buggy;  price,  $135.00; 

discount,  $15.00 ;  net  amount  paid,  $120.00. 

(14)  Attended  church  with  family.     Our  pastor  preached 

on  the  'Trodigal  Son."  Collection,  25c.  Paid 
quarterly  dues,  $10.00. 

(15)  Mother  took  sick  suddenly.     Dr.  Brown  considers  her 

case  very  serious. 

(16)  Hired  Frank  Johnson  for  six  months  @  $30.00  per 

month  and  board.  Mother  is  better. 
(17  to  28)  [Student  will  insert  at  least  one  imaginary  entry 
for  each  date.  Try  to  use  good  judgment  as  to  what 
might  happen  and  what  might  be  purchased  and 
sold  during  the  remainder  of  the  month.  Be  care- 
ful not  to  pay  more  money  than  you  have  received.] 

(29)  Paid  the  following  bills:     Skinner  Bros.,  Dry  Goods, 

$14.50;  Murdock's,  Groceries,  as  per  bill  on  file, 
$15.60.  Sold  Murdock's  20  doz.  Eggs  @  20c.;  12 
Dressed  Spring  Chickens  @  30c. 

(30)  Received  Cream  check.     See  Statement  on  file,  $45.30. 

You  will  now  balance  the  cash.  Add  the  two  col- 
umns; find  the  difference  and  enter  it  on  a  new 
page,  as  shown  on  page  19. 

LESSON  3 

PERSONAL  ACCOUNTS 

I.     General  Instructions. 

Use  three-column  Journal  paper.     This  lesson  is  illustrated 
on  pages  22  and  23.     Read  carefully  page  21. 

IT.     Written  Work. 

Prepare  two  sets  of  accounts,  one  entitled  "Others  Owe  Us" 
and  the  other  "We  Owe  Others." 

(a)    ''Others  Owe  Us.'' 

1.    Mrs.   Richard   King,   a   neighbor,  has   been  buying 
dairy  and  poultry  products  on  account.     Her  ac- 


32  FARM    ACCOUNTING 

count  is  illustrated  on  page  22.  Prepare  her 
account  with  the  following  entries: — 

May     1.     There  was  a  balance  due  from  April, 

$3.80 ;  1  lb.  Butter,  20c. 
May     3.     2  doz.  Eggs  @  15c. 
May     5.     1  Chicken,  30c. 
May  12.     2  lbs.  Butter  @  20c. 
May  18.     2  qts.  Strawberries  @  15c. 
May  25.     1  qt.  Cream,  20c. 
May  31.     1    lb.   Butter,   20c.;   paid   cash,    $5.00. 

[Balance  the  account  as  illustrated.] 

2.  In  a  similar  manner  prepare  an  account  with  the 

Adams  Mercantile  Co.,  with  whom  we  are  trading 
and  who  are  buying  produce  from  us.  The  entries 
are  as  follows : — 

June  4.  5  bu.  Potatoes  @  75c. 
June  8.  60  bunches  Onions  @  40c.  per  doz.; 
10  doz.  Sweet  Corn  @  20c.  On  the  same  date 
we  bought  goods  as  per  their  bill  on  file,  $6.50. 
June  15.  8  crates  of  Strawberries  @  $1.75;  20 
doz.  Eggs  @  15c.  On  the  same  date  we  bought 
a  Suit  for  William  for  $13.00.  [Prepare  t]iis 
account;  rule  and  balance  the  same  as  Mrs. 
King's  account.     The  balance  due  is  $5.25.] 

3.  In  a  similar  manner  prepare  three  additional  original 

accounts  of  not  less  than  ten  entries  to  each. 

(b)    ''We  Owe  Others." 

1,    Frank  Johnson,  one  of  the  farm  hands,  has  requested 
that  his  wages  be  left  on  account,  and  that  he  be 
allowed  to  draw  as  he  needs  from  time  to  time.     The 
following  items  enter  into  his  account.      [Prepare  it 
exactly  the  same  as  the  five  preceding  accounts.] 
April  30.     Wages  for  April,  $30.00. 
May     1.     Cash,  $10.00. 
May     5.     Bought  Clothing  for  him  at  Goddard's, 

$7.20. 
May  10.     Cash,  $5.00. 
May  20.     Cash,  $3.00. 


SINGLE   ENTRY  33 

May  31.  Credit  Wages  for  May,  $30.00.  [Rule 
and  balance  as  heretofore.] 
2.  July  1.  Bought  a  3-year-old  Horse,  "Jim,*'  for 
$150.00,  on  condition  that  it  was  to  be  paid  for  at 
the  rate  of  $25.00  per  month.  Four  payments  have 
been  made  on  the  first  of  each  month,  beginning 
August  1st.  [Write  up  the  account.  Rule  and 
balance  as  heretofore.] 

LESSON  4 
STATEMENT  No.  2 

I.  General  Instructions. 

We  have  now  arrived  at  the  end  of  the  year  and  we  are 
ready  to  prepare  the  second  financial  statement.  Use  three- 
column  Journal  paper.  This  lesson  is  illustrated  on  page  20. 
Read  carefully  pages  15  and  16. 

II.  Written  Work. 

Step  1.  Take  inventories  of  all  your  property,  listing  and 
placing  a  fair  valuation  on  it,  same  as  in  Lesson  1. 

Step  2.  Go  through  your  personal  accounts,  balance  them 
as  illustrated  in  Lesson  3,  and  extend  the  amounts  under  the 
various  headings  in  the  inventory — Grain,  Stock,  etc. 

Step  3.  If  you  own  any  notes,  stock,  or  other  valuables, 
list  them  under  Bills  Receivable.  Be  sure  not  to  omit  any- 
thing you  own  or  owe. 

The  above  directions  merely  indicate  how  an  inventory  is 
taken.  The  following  inventories  are  assumed  and  you  will 
prepare  a  statement  exactly  as  heretofore.  Compare  the 
values  and  find  totals.     See  page  20. 

Inventory,  April  1,   1909 

Resources:  Farm,  $8,620.00.  Produce:  150  bu.  Corn  @ 
55c. ;  175  bu.  Oats  @  43c. ;  253  bu.  Wheat  @  87c. ;  20  tons 
Hay  @  $6.50;  Potatoes  and  Vegetables,  $40.00.  Stock:  6 
Horses  @  $100.00;  1  3-year-old  Horse,  ''Jim,"  $150.00;  22 
Cows  @  $42.00;  14  Steers  @  $13.00;  4  Heifers  @  $11.00; 
11  Hogs  @  $6.00.  Poultry:  165  Chickens  @  45c.;  25  Tur- 
keys   @   75c.;    10   Geese    @    70c.      Implements:     1   Binder, 


31  FARM    ACCOUNTING 

$120.00;  2  Plows  @  $9.00;  2  Harrows  @  $11.50;  1  Mower, 
$40.00;  1  Hay  Rake,  $13.00;  1  Grain  Drill,  $45.00;  2  Wagons, 
$40.00  and  $60.00;  1  new  Wagon,  $100.00;  2  Sets  Harness, 
$25.00  and  $65.00;  1  Surrey,  $130.00;  1  Light  Buggy,  $50.00; 
Tools,  $50.00.  Supplies,  $30.00.  Household  Goods,  $350.00; 
Piano,  $300.00.  Life  Insurance,  $1,073.40.  Cash  and  Bank, 
$126.04. 

Liabilities:  Labor  (unpaid),  $85.00.  Accounts  Payable, 
$142.32.  Mortgage,  favor  Iowa  Trust  Co.,  $3,000.00.  Note, 
favor  Western  Lumber  Co.,  $200.00.  Due  on  Piano  to  Smith 
Bros.,  $200.00. 

Having  completed  the  statement  of  Resources  and  Liabili- 
ties, you  will  now  determine  the  profit  for  the  year.  Skip  one 
line  and  write  the  following  statement,  inserting  the  net  worth 
in  Statement  No.  1  and  what  you  find  above. 

Statement   of    Profits  and  Losses 

Net  worth  now $ 

Net  worth  last  year  (Statement  No.  1) $ 

Net  profit  (or  loss) $ . 

Your  result  will  agree  with  the  illustration  on  page  20,  if 
correct.  Dividing  the  gain  with  last  year's  net  worth,  we  find 
that  you  have  made  a  gain  of  about  nine  per  cent,  on  your 
investment  and  labor. 

LESSON  5 

THE   BANK   ACCOUNT 

I.     General  Instructions. 

Study  the  remarks  on  banking  on  page  25.  You  are  sup- 
posed to  have  opened  an  account  with  the  Citizens'  National 
Bank  and  to  have  performed  the  transactions  given  below. 
The  bank  has  given  you  a  pass  book  in  which  the  teller  will 
enter  the  deposits  as  they  are  made,  and  the  checks,  when 
they  are  returned  once  a  month.  You  have  kept  a  private 
account  with  which  you  check  monthly. 

XL     Written  Work. 

1.     Enter  the  following  on  a  sheet  of  Journal  paper,  as 


SINGLE  ENTRY  3:8 

illustrated  on  page  26.     Extend  the  balance  after  Nos.  351, 
354,  358,  368,  and  371. 

Deposits:  April  1,  $98.35;  (3),  $70.00;  (6),  $90.00;  (9), 
$40.50;  (13),  $125.00.  The  checks  drawn,  beginning  with 
No.  350,  are  as  follows :  April  1,  Mrs.  Martin  Harris,  $30.00 ; 
Odell  Seed  Co.,  $10.00.  (3),  Emma  Johnson,  $1.50;  Brown 
&  Pickett,  $3.00.  (5),  Salem  Implement  Co.,  $20.00;  E. 
Skidmore,  $65.00;  Empire  Lumber  Co.,  $3.75.  (6),  County 
Recorder,  $3.00.  (8),  Earle  &  Crockett,  $80.00;  Farmers* 
Supply  Co.,  $15.40.  (9),  Frank  Johnson,  $10.00;  Goddard 
Hardware  Co.,  $3.50;  Mrs.  Martin  Harris,  $30.00;  Crown 
Fertilizer  Co.,  $6.40;  0.  N.  Smith,  $15.80.  (13),  County 
Treasurer,  $30.40;  Kimball  Livery  Co.,  $15.00;  Brown  & 
Pickett,  $2.50.  (20),  C.  J.  Ol^bn  &  Son,  $15.00;  Horning  & 
Bacon,  $10.00;  Crawford  Hardware  Co.,  $10.50.  (23),  Brown 
&  Pickett,  $13.30. 

2.  At  the  end  of  the  month  add  the  checks  and  deposits  and 
find  the  difference.     The  resulting  balance  should  be  $29.80. 

3.  The  bank  has  returned  your  pass  book  with  the  canceled 
checks.  You  have  arranged  them  numerically  and  find  that 
all  are  returned  except  Nos.  361,  366,  and  369.  In  other 
words,  the  bank  has  paid  all  except  these  checks.  By  adding 
the  outstanding  checks  to  your  balance  you  find  that  the  bank 
balance  ought  to  be  $58.30,  which  you  find  agrees  with  the 
pass  book.  The  canceled  checks  should  be  filed  numerically 
and  kept  for  future  reference. 


Second  Method 

A  system  of  modified  double  entry  in  which  the  special 
column  Journal,  or  Cash  Book,  is  the  basis.  It  is  the  most 
satisfactory  and  labor-saving  system  in  a  cash  business,  where 
personal  accounts  are  few  and  where  accurate  results  are 
desired.  The  personal  accounts  are  to  be  carried  exactly  as 
in  the  first  method,  if  such  accounts  are  kept  at  all. 


CHAPTER  III 

MODIFIED  DOUBLE  ENTRY,  THE  SPECIAL  COLUMN 

CASH  BOOK 

Not  many  generations  ago  it  was  considered  sufficient  for 
the  average  manufacturer  merely  to  record  his  cash  receipts 
and  expenditures  and  to  keep  a  tolerably  accurate  check  on  the 
cash  balance.  In  many  instances  the  left  trousers  pocket 
served  as  the  debit  side  and  the  right  as  the  credit  side  of  the 
"Ledger."  Modern  business  methods  and  sharp  competition 
have  changed  these  notions  until  to-day  it  is  necessary  to  know 
the  cost  of  production  in  advance  to  the  smallest  detail.  An- 
cient business  methods  prevail  yet,  very  generally,  on  the  farm. 
The  wonderful  progress  of  the  American  farmer  is  due  to 
marvelous  natural  resources,  labor-saving  inventions,  and 
natural  ingenuity,  rather  than  to  wise  and  prudent  manage- 
ment. 

Necessity  of  Careful  Accounting 

In  certain  respects,  a  farmer  must  combine  the  methods  of 
the  manufacturer  and  the  merchant.  He  must  learn,  not  only 
how  to  increase  production,  but  also  how  to  facilitate  the  prof- 
itable exchange  of  his  products.  He  must  reduce  the  cost  of 
production  to  the  minimum  by  increasing  the  quality  and  the 
quantity  of  his  products,  and  by  getting  full  value  out  of  labor. 
He  must  manage  so  that  his  working  force,  farm  hands,  chil- 
dren, horses,  all,  are  constantly  employed.  This  requires  most 
skillful  management  in  the  rotation  of  crops,  in  the  division 
of  labor,  in  selecting  seeds,  fertilizers,  and  stock;  and,  above 
all,  it  requires  general  prudence  in  purchasing  equipment  and 
supplies,  and  in  marketing  products.  Progressive  farmers 
require  a  variety  of  records  to  assist  in  the  proper  manage- 
ment of  their  business.  A  first-class  set  of  books  is  just  as 
indispensable  to  them  as  to  the  banker  or  to  the  manufacturer. 

Superiority  of  Double  Entry 

A  careful  comparison  of  the  results  obtained  in  the  last 
chapter  with  the  balance  sheet  given  on  page  47  will  convince 

(37) 


38  FARM    ACCOUNTING 

the  reader  of  the  superiority  of  double  entry.  It  will  be  ob- 
served that  the  only  result  obtained  by  a  comparison  of  inven- 
tories was  the  net  profit  or  loss.  The  source  or  causes  of  these 
results  cannot  be  obtained  by  this  method.  The  method  sug- 
gested in  Chapter  II  has  this  advantage:  There  is  not  a 
farmer  so  busy  or  so  ignorant  that  he  cannot  adopt  it  and 
derive  great  benefit  from  its  use.  But  the  ambitious,  progress- 
ive farmer  will  not  be  satisfied  with  this  primitive  method 
any  more  than  a  wide-awake  merchant  will  be  satisfied  with 
single  entry  bookkeeping.  He  will  adopt  a  system  which  will 
give  him  at  any  time  reliable  information  as  to  his  financial 
standing,  cost  of  production  of  crops,  live  stock  and  poultry, 
household  expenses,  etc.,  and  by  which  he  can  prove  that  his 
work  is  correct. 

Single  and  Double  Entry  Compared 

The  distinction  between  single  and  double  entry  is  unimpor- 
tant for  our  present  purpose,  but  it  may  be  a  satisfaction  to 
the  student  to  know  that  the  method  we  are  now  to  consider 
is  double  entry.  The  important  distinction  between  the  two 
methods  is  that  in  double  entry  accounts  are  kept  with  per- 
sons, property,  and  allowances,  while  in  single  entry  accounts 
are  kept  with  persons  only.  In  double  entry  there  is  a  corre- 
sponding debit  for  every  credit;  the  total  debits  and  credits 
must  therefore  be  equal,  and  must  balance  at  any  time.  This 
becomes  clear  by  referring  to  the  Cash  Book,  page  44.  In  the 
first  entry,  the  amount  is  entered  in  both  the  Total  and  in  the 
Sundries  column;  and  the  same  is  true  of  all  the  succeeding 
entries.  Hence  the  sum  of  columns  four  to  ten  inclusive  must 
equal  the  total  in  column  three.  You  will  find  the  same  to  be 
true  of  the  Payments,  and  of  the  Household  Accounts. 

Additional  Books  Needed 

Very  important  books  in  double  as  well  as  in  single  entry 
are  the  Day  Book  and  the  Bill  File.  They  are  to  be  kept  in 
exactly  the  same  way  as  suggested  under  single  entry,  except 
that  no  cash  entries  are  recorded  in  the  Day  Book.  It  is  used 
only  as  a  diary.  The  important  consideration  now  is  to  adopt 
additional  records  that  will  furnish  the  necessary  informa- 


MODIFIED   DOUBLE   ENTRY  3^ 

tion  in  systematic  and  tabular  form  requiring  the  minimum 
amount  of  labor. 

The  Gash  Book 

The  Cash  Book  is  the  basis  of  classification.  A  very  con- 
venient form  is  given  on  pages  44  and  45.  The  special  col- 
umns take  the  place  of  a  Ledger.  All  money  columns  except 
the  total  column  will  be  referred  to  as  distribution  columns. 
They  are  in  reality  separate  accounts,  and  this  form  might, 
therefore,  properly  be  called  a  combined  Ledger  and  Cash 
Book.  The  form  suggested  has  the  important  advantage  of 
being  self -balancing.  A  trial  balance  can  be  taken  at  the  end 
of  each  page,  month,  or  year,  as  illustrated  on  page  57.  The 
process  of  preparing  a  financial  statement  becomes  extremely 
simple  by  this  method.  A  few  observations  regarding  equip- 
ment and  supplies,  improvement  and  repairs,  will  be  of  assist- 
ance in  using  the  distribution  columns. 


flquipment  and  Supplies 

In  accurate  accounting,  the  question  often  arises:  What 
shall  be  considered  equipment,  and  what  supplies?  Supplies 
are  defined  as  expendable  or  consumable  materials,  which  are 
incapable  of  being  used  more  than  once;  while  equipment  is 
of  more  permanent  character,  articles  which  can  be  used 
repeatedly.  Fuel,  lubricating  oil,  cotton  waste,  feed,  etc.,  are 
supplies;  while  machinery,  furniture,  and  apparatus  of  all 
kinds  are  equipment. 

Improvements  and  Repairs 

The  distinction  between  improvements  and  repairs  is  not 
always  clearly  understood.  An  improvement  adds  value  to 
the  property,  in  the  shape  of  equipment,  buildings,  drains, 
fences,  and  the  like,  while  repairs  merely  keep  up  the  property. 
A  coat  of  paint  on  an  unpainted  building  is  an  improvement ; 
repainting  is  classed  under  repairs.  This  distinction  is  very 
important  in  making  an  inventory.  Improvements  are  added 
to  the  inventory,  repairs  are  not. 


40  FARM    ACCOUNTING 

Gash  Balance  and  Sundry  Columns 

The  cash  balance  is  found  as  follows : — 

Total  receipts $653.14 

Total  payments 578.80 

Balance $74.34 

Note  that  the  totals  of  the  distribution  columns  equal  the 
total  of  column  on  both  sides  of  the  Cash  Book.  The  Sundries 
column  contains  all  entries  which  do  not  fall  under  the  special 
columns.  At  the  end  of  the  year  the  items  are  segregated 
under  various  titles.  The  segregation  for  the  month  of  April 
is  as  follows : — 

Sundry  Receipts  Column 

Balance   $126.04 

Labor 10.00 

Wood   22.40 

Total    .$158^ 

Sundry  Payments  Column 

Interest  $22.00 

Taxes 33.40 

Accounts  Payable 15.80 

Insurance    35.10 

Total    .$106.30 

Improvements  and  Repairs  Column 

Improvements $80.00 

Repairs   34.60 

Total    .$114.60 

Trial  Balance 

In  the  language  of  the  accountant,  a  trial  balance  is  a  test  of 
the  equality  of  the  debits  and  credits  in  a  set  of  double  entry 
books.  Our  trial  balance  is  much  simpler ;  it  is  simply  a  test 
of  equality  of  the  total  columns  and  the  distribution  columns. 
In  the  Cash  Book,  merely  add  the  distribution  columns  on  each 
side  and  note  that  their  sum  equals  the  respective  total  col- 


MODIFIED   DOUBLE   ENTRY  41 

umns.     The   Household  accounts  are   balanced   in   the  same 
manner. 

The   Ledger 

With  a  special  column  Cash  Book,  the  Ledger  can  be  dis- 
pensed with  in  most  cases.  The  further  classification  of  the 
Sundry  columns  can  be  done  at  the  end  of  the  year,  as  illus- 
trated on  page  46,  and  a  few  pages  of  the  Day  Book  can  be 
devoted  to  "What  We  Owe  Others"  and  "What  Others  Owe 
Us."  Where  a  special  Ledger  is  found  necessary,  the  form 
shown  on  pages  77  or  82  can  be  used. 

The  old-style  Ledger  possesses  some  advantages  over  any 
other  form.  The  debit  appears  on  the  left  and  the  credit  on 
the  right  side  on  the  same  page.  It  is  used  either  in  double 
or  single  entry.  The  difficulty  of  keeping  the  Ledger  in  bal- 
ance prevents  the  use  of  the  double  entry  Ledger  to  a  very 
large  extent.  This  is  especially  true  if  an  attempt  is  made 
to  use  the  ordinary  Journal. 

Direct  entries  into  either  the  double  or  single  entry  Ledger 
present  less  difficulties,  and  the  method  is  recommended  where 
the  classification  of  accounts  is  such  as  to  make  the  combined 
Cash  Book  and  Ledger  unpractical.  This  need  scarcely  ever 
be  the  case,  however,  because  if  ruled  sheets  cannot  be  ob- 
tained without  headings,  a  blank  sheet  may  be  ruled  with  any 
number  of  columns  and  headed  with  titles  to  suit.  For 
example,  an  orchardist  would  head  his  Receipt  columns 
Apples,  Prunes,  Peaches,  Small  Fruits,  etc.;  while  an  exclu- 
sive stock  farmer  would  devote  special  columns  to  the  different 
kinds  of  stock. 

The  advantage  of  the  Ledger  method  is  that  each  account  is 
more  condensed,  while  the  self -proving  and  labor-saving  fea- 
tures are  important  in  the  special  column  Cash  Book.  Pre- 
paring a  trial  balance  and  balance  sheet,  and  closing  the 
Ledger  properly,  though  very  simple  for  the  experienced 
accountant,  requires  a  proficiency  in  bookkeeping  that  few 
farmers  possess. 

On  page  77  is  an  illustration  of  the  ordinary  form  of  direct 
entry  Ledger,  showing  the  entries  for  April  1st.  Compare 
these  with  the  first  entries  on  pages  44  and  45,  and  note  the 
similarity  of  results.     In  the  form  follow  the  arrows  and  note 


42  FARM    ACCOUNTING 

that  there  is  a  debit  for  every  credit,  and  vice  versa.  In  the 
column  marked  (a)  is  entered  the  Day  Book  page,  if  the 
entries  have  been  previously  made  in  that  book. 

The  Annual  Statement 

The  annual  statement  exhibits  in  a  condensed  form  the 
financial  operations  for  a  given  period.  It  shows  the  resources 
and  liabilities,  the  cash  receipts  and  expenditures,  the  profits 
and  losses,  the  net  profit  or  loss,  and  the  net  worth.  It  enables 
the  proprietor  to  analyze  his  business  with  considerable  ac- 
curacy and  to  trace  the  sources  of  profits  and  losses.  There 
are  various  forms  of  statements,  but  the  illustration  on  page 
47  seems  best  suited  to  the  farming  business.  Statement 
No.  3  shows  the  results  of  a  month's  business  only.  The 
inventories  are  obtained  from  separate  schedules  and  the  cash 
receipts  and  expenditures  are  the  totals  found  in  the  Cash 
Book.  The  profit  and  loss  accounts  are  fully  analyzed  after 
Statement  No.  4. 


MODIFIED   DOUBLE   ENTRY  43 

Illustrative  Lessons 

LESSON  6 
CASH   RECEIPTS,   SET  1 
I.     General  Instructions. 

Use  Forms  2  and  3.  This  exercise  is  illustrated  on  page  44. 
The  result  of  your  work  will  be  exactly  as  illustrated  on  that 
page,  if  correct.  Do  not  merely  copy  page  44,  but  compare 
your  work  with  the  illustration  after  you  have  done  your  best. 
Before  beginning  your  written  work  read  very  carefully  pages 
37  to  42.  This  should  convince  you  that  double  entry  is  far 
superior  to  single  entry. 

XL     Written  Work, 

1.  Turn  to  Form  2  in  your  Cash  Book  and  enter  the 
following  items  in  the  proper  columns : — 

April  1,  Balance  forwarded,   $126.04    (Total  and  Sundry 

columns)  ;  2  tons  Clover  @  $6.00;  80  bu.  Corn  @ 

65c. 
(3)     12  Cabbages  @  10c. ;  25  lbs.  Butter  @  25c. 
(6)     2   Steers   @    $40.00;   20   Spring   Chickens    @    45c.; 

Hauling  Coal,  1  day,  $5.00. 
(9)     Jersey  Calf,  $10.00;  2  cords  Wood  @  $4.00;  5  bu. 

Potatoes  @  $1.00. 

(12)  Heifer,  $25.00;  10  lbs.  Butter  @  28ic. 

(13)  75  bu.  Corn  @  65c.;  Work  on  County  Road,  $5.00; 

4  bu.  Apples  @  $1.50. 
(15)     20i  doz.  Eggs  @  20c.;  36  lbs.  Butter  @  25c.;  2  tons 

Clover  @  $6.00. 
(17)     100  Apple  Trees  @  20c.;  1  Steer,  $37.00;  12  Cedar 

Posts  @  20c. 

(19)  6  Spring  Chickens  @  40c. ;  95  bu.  Corn  @  60c. ;  3  tons 

Hay  @  $6.00. 

(20)  Jersey  Calf,  $10.00;  50  bu.  Oats  @  35c. 
(23)     1  Turkey,  $1.40;  1  bu.  Clover  Seed,  $1.50. 
(26)     18  lbs.  Cheese  @  15c. 

(29)     3  cords  Wood  @  $4.00;  10  bu.  Barley  @  40c.;  4  tons 
Timothy  @  $5.50. 


44 


FARM    ACCOUNTING 


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MODIFIED   DOUBLE   ENTRY 


45 


PAYMENTS 


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46  FARM    ACCOUNTING 

(30)     Produce  for   Household  Use,   Orchard,  and   Garden, 
$5.25;  Dairy,  $6.50;  Poultry,  $6.30. 

2.  Add  the  columns.  The  correct  results  are  as  follows: 
Total,  $653.14;  Grain,  $179.25;  Hay,  $65.50;  Orchard  and 
Garden,  $37.45;  Stock,  $162.00;  Dairy,  $27.30;  Poultry, 
$23.20;  Sundries,  $158.44. 

Note  that  the  total  of  the  distribution  columns  equals  the 
total  column. 

3.  The  Sundry  column  contains  the  following  items: — 

Balance,  April  1st $126.04 

Labor 10.00 

Wood   22.40 

Total $158.44 

Verify  Step  3  by  setting  down  each  item  under  its  appro- 
priate head  and  adding.  Arrange  your  work  as  shown 
above. 


LESSON  7 

CASH   PAYMENTS,   SET   1 

L     General  Instructions. 

See  Lesson  6.  You  will  fill  in  the  items  between  the  15th 
and  23d,  omitted  in  the  illustration.  If  payments  are  made 
by  check  and  the  bills  filed  for  reference,  the  items  need  not  be 
entered  in  the  Cash  Book.  The  payee,  the  amount  of  the 
check,  and  the  distribution  are  sufficient  entries. 

11.     Written  Work. 

1.  Enter  the  following  expenditures  for  April  on  Form  3. 
(See  page  45.) 

April  1,  on  Household  Expenses,  $30.00  (Total  and  House- 
hold columns) ;  12  bu.  Seed  Wheat  @  83 J  c. 

(3)  Labor  in  Garden,  $1.50;  shod  "Cap"  and  "Maud," 
$3.00. 

(5)  Interest  M.  P.  Co.,  $20.00;  Jersey  Cow,  $65,00;  Laths 
and  Shingles,  $3.75. 


MODIFIED   DOUBLE   ENTRY 


47 


Financial  Statement. Year  Ending  .W^.?^-..*^//.... ^.19^ if 


C&sh  Receipts  and  Paymentp 


Receiptb 

Balance  forwarded I , 

GraiD    

Hay 

Orchard  and  Garden. 

Stock. 

Dairy 

Poultry 

Sundries. 

Machine  and  Implements 

Hired  Labor 


pAYltraJTS. 

Hou8ebold*9^/i?<'^.<?<».«/ 


%JfSZ$P 

Trees,  Seeds  and  FertiiL«er8 JX^ 


HTpkz^ 


jabor 

General  Expense 

Stock 

Machines  and  Implements. 

Farm  (improvements) 

Repairs 

Son  dries: — 

Life  Insurance 

PerRonal  Expense 

Accounts  Payable 

Interest. 

Taxes 

Gifts 

Insurance, 


fV>  ^f^tnUry.  &^ 


TJt^ 


R»aovirc«e  aoicC  LiabiUU**. 


HssoimcBS. 

Farm  (market  value) %f.0JO 

Cash  and  Bank 2.  "  ' 

Life  Insurance  (Paid  up  value) . .       /.  /.  _, 

Stock* Jfli: 

Grain* J./fl 

Hay" y.^T..,.. 

Orchard  and  Garden* jifA  .0*. 

Dairy  Products* 

Poultry* /  tf,0 

Machines  and  Implements* ^'**^ 

Household  Goods %SZ 

General  Supplies ^-3^ 


Total $/^7f.476 


v.* 


JTJf 


Kired  Labor 

Bills  Payable 

Accounts  Paymble  . . . 
Gifts 


9....J.^ao. 

.09. 


Net  Worth 

Tot»l.... 


fii^B 


i 


>  As  per  Invantory 


Statement  of  Proftt  axudi  Los*. 


Ket  Worth  (as  above) , ,,^ 

Net  Worth  last  year «      /AjSY 4^i 


Gain  for  the^year y, y. /fi..j 


WL 


ANNUAL   STATEMENT 


48 


FARM    ACCOUNTING 


Accounts  SKowing  Profit  or  Loss,  Year  Ending M I f?^.^.:.'^/...\9i^:f 

(Amounts  are  Uib-Ji  from  Inventories,  Cash  Book,  and  Special  Records.) 


GRAIN 


Coer. 


Invrntory  la&L  year. . , 
Labor 


Inter.  *tan  VnJuejpf/Land 


er>^ 


47 p  ^^ 


Retdrnb. 


Net  Profit 


?<^' 


ToUL 


%/f./X 


% 


7f 


Present  Inventory . . 
Receipts  from  Sales 

Fed  to  Stock 

Fed  to  I'oultry 


ir<? 


Total %/f./Z^.<i 


.0.7 

0.9 


STOCK. 


Cost 


Inventory  laat  year $ 

Labor 

Grain 

Hay 

Interest  on  Inventory  last  yeai  . . 
PaGturag^  on  L^^d 

6A.iA..9MTf*Y 


Net  Profit 


.yjjj[.<>.*> 


Returns. 

Present  Inventory %./.  fT'.o.  S'a 

Ivece: pts  from  Sales J.3.P.Q  .99. 

Receipts  from  Dairy /.O.  fSJ.% 

Labor  (Cash  Receipts /.■SS./J 


Toul $y^r^/ 


77 


Total . 


)TJzy. 


77 


ORCHARD  AND  GARDEN 


Cost. 


Inventory  last  year $ . 

Labor  and  Marketing 

Interest  on  Land 


Not  Profit 


Total. 


Returns. 


Present  Inventory %. 

Receipts 


Total. 


Cost. 


Inventory  laatyear. 

Labor .-.-. 

Interest  on  Land . . . 


Net  Profit 


HAY 


Returns 
J.3.P.\P9.         Present  Inventory %..  .IkSx'lS. 


2ff 


7^ 


Total %.S.3,7aJ^> 

(Account) 

...    $ 


Cost. 


Total. 


Receipts iLO.H^.lLO 

Fed  to  Stock /.y!^ .  $.0 


Total.... t.J'JlS.l^S 


Returns. 


$ Total.. $. 

ANNUAL   STATEMENT 


(6 
(8 

(9 

(12 
(13 

(14 
(15 

(17 
(19 

(20 

(23 

(25 
(26 
(29 
(30 


Modified  double  entry  4d 

Garden  Seed,  $1.60;  Road  Tax,  $3.00. 

Addition   to    Barn    (contract),    $80.00;    Crates   and 

Bags,  $15.40. 
Wages  to  Johnson,  $10.00;  Steel  Frame  Grindstone, 

$3.50. 
200  ft.  Lumber  @  $10.00  per  M. ;  1  Shovel,  $1.25. 
On  Household  Expenses,  $30.00;  John  Smith,  labor, 

$2.50 ;  Staples,  35c. 
Taxes,  $30.40. 
Cash  for  personal  use,  $3.50;  Rip  Saw,  $2.50;  paid 

0.  N.  Smith  in  full,  $15.80. 

Pruning  Orchard,  $2.50 ;  Chicken  Feed,  $5.00. 

Manure  from  Kimball  Livery,  $15.00;  Horse  Shoeing, 
$2.50 ;  Trip  to  Ames,  $4.50 ;  Patent  Fertilizer,  $6.40. 

Leghorn  Pullet,  $2.10;  Plastering  and  Paper  Hang- 
ing, $15.00;  2  Halters  @  90c.;  Wages  to  Johnson, 
$10.00. 

On  Household  Expenses,  $30.00;  Trees  and  Shrubs, 

1.  N.  C,  $25.80 ;  Alfalfa  Seed,  $3.20 ;  2  doz.  Leghorn 
Eggs,  $5.80. 

Interest  on  Binder  note,  $2.00;  Angora  Goat,  $10.00; 

Private  Expenses,  $5.00;  ^  doz.  Gopher  Traps,  $1.50. 
Repairs  on  Horse  Stalls,  $13.50 ;  1  Keystone  Dehorner, 

$10.50. 
2    Geese,    $3.00;   Wages   to   Johnson,   $10.00;   Apple 

Boxes,  $3.75. 
Butter  Wrappers,   $1.75;    Life    Insurance  Premium, 

$35.10;  Produce  for  Household,  $18.05. 


2.  Add  the  columns.  The  correct  results  are  as  follows: 
Total,  $578.80;  Household  and  Personal,  $116.55;  Seeds  and 
Fertilizers,  $62.00;  Hired  Labor,  $36.50;  General  Expenses 
and  Marketing,  $30.90;  Stock  and  Feed,  $90.90;  Machinery, 
Implements,  and  Tools,  $21.05;  Repairs,  $114.60;  Sundries, 
$106.30.  Your  distribution  columns  may  not  agree  with  the 
totals  given,  but  note  that  the  total  of  the  distribution  columns 
equals  the  total  column. 

3.  By  going  through  the  Sundry  column  we  find  that  it 
contains  the  following: — 


50  FARM    ACCOUNTING 

Interest  $22.00 

Taxes 33.4O 

Accounts  Payable , 15.80 

Insurance    35.10 

Total $106.30 

4.  Classify  the  Improvements  and  Repairs  column.  (See 
definition  of  improvements  and  repairs,  page  39.)  The  cor- 
rect result  is  as  follows : — 

Improvements $80.00 

Repairs    34.60 

Total    $114.60 

5.  Balance  the  cash  by  taking  the  difference  between  the 
total  receipts  and  the  total  expenditures.  The  correct  dif- 
ference is  $74.34. 


LESSON  8 
FINANCIAL  STATEMENT  No.  3 

I.     General  Instructions. 

Under  ordinary  circumstances  a  financial  statement  should 
be  made  out  only  once  a  year,  but  for  additional  practice  you 
may  prepare  a  statement  covering  the  first  month.  As  will 
be  observed  on  page  47,  this  is  a  condensed  statement  of  cash 
Receipts  and  Expenditures  as  they  appear  in  the  different 
columns  of  the  Cash  Book ;  a  statement  of  Resources  and  Lia- 
bilities ;  and,  finally,  a  statement  of  Profits  and  Losses.  Your 
Balance  Sheet  will  be  exactly  like  the  illustration  except  as' 
to  amounts.  The  new  inventories  are  as  follows:  Farm,^ 
$8,700.00;  Cash  and  Bank,  $74.34;  Stock  and  Feed,  $2,145.00; 
Grain,  $105.00;  Hay,  $55.00;  Orchard  and  Garden,  $35.20; 
Dairy  Products,  $26.30;  Poultry,  $122.80;  Machinery,  Imple- 
ments, and  Tools,  $870.05 ;  Household  Accounts,  $650.00 ;  Life 
Insurance,  $1,136.80;  General  Supplies,  $25.00;  Hired  Labor, 
$85.00;  Bills  Payable,  $3,200.00;  Accounts  Payable,  $326.52. 


MODIFIED   DOUBLE   ENTRY  51 

II.     Written  Work. 

1.  On  a  statement  blank  (Form  12)  enter  the  cash  Receipts 
and  Payments  under  the  respective  titles.  The  Sundry  col- 
umns were  segregated  in  Lessons  6  and  7. 

2.  Enter  the  Resources  and  Liabilities  and  check  with  the 
illustration.  Then  find  the  Net  Worth  and  Profit  or  Loss. 
In  this  case  there  is  a  loss  of  $1.01,  due  to  the  fact  that  April 
is  naturally  an  unproductive  month  for  the  farmer. 

3.  The  detailed  statement  of  the  profits  or  losses  on  Grain, 
Stock,  etc.  (Form  13),  will  not  be  taken  up  until  at  the  end  of 
the  year  (Lesson  11). 

LESSON  9 
CASH  RECEIPTS,  SET  2 

I.  General  Instructions. 

The  next  set  is  similar  in  principle  to  Set  1,  and  is  given 
for  additional  practice.  The  same  forms  are  used.  For  the 
purpose  of  completing  a  year's  work  in  the  next  balance  sheet, 
we  assume  the  amounts  to  be  forwarded  for  eleven  months, 
March  being  the  last  month  of  our  fiscal  year. 

II.  Written  Work. 
Enter  as  in  Lesson  6. 

March  1.  Forwarded:  Total  Receipts  (to  be  entered 
horizontally  under  the  proper  headings  on  Form 
2),  $3,644.34;  Grain,  $591.93;  Hay,  $134.95;  Or- 
chard and  Garden,  $277.95;  Stock,  $1,110.50; 
Dairy,  $997.07;  Poultry,  $246.14;  Sundries,  $285.80. 
(1)     2  Pigs  @  $6.25. 

(3)     20  bu.  Apples  @  65c.;  50  bu.  Potatoes  @  45. 
(7)     3  tons  Clover  @  $6.50;  1  Veal  Calf,  $9.00;  40  bu. 

Oats  @  45c. 
(9)     25  lbs.  Dressed  Chicken  @  20c. 
(10)      10  doz.  Eggs  @  15c.;  1  Cow,  $45.00. 
(12)      1  ton  Clover,  $6.50;  sold  old  Wagon,  $10.00. 
(15)     Hired  out  Team  and  Buggy,  $4.00;  Labor  on  County 
Road,  $5.00. 


^52  FARM   ACCOUNTING 

(16)      50  bu.  Corn  @  60c.;  95  boxes  Strawberries  (5)  15c.; 

10  lbs.  Butter  @  25c. 
(19)     3  tons  Timothy  @  $5.75;  3  days'  Labor  for  Johnson 

&  Co.  @  $1.60;  14  doz.  Eggs  @  15c. 
(21)     2-year-old  Colt,  $75.00;  Strawberry  Plants,  $4.60;  18 

lbs.  Butter  @  25c.;  4  qts.  Cream  @  15c.;  4  Calves 

@  $12.00. 
(24)     50  bu.  Oats  @  40c.;  10  Dressed  Chickens  @  30c. 
(28)     50  bu.  Corn  @  65c.;  3  tons  Timothy  @  $5.00;  sold 

1  set  Harness,  $32.40 ;  2  tons  Clover  @  $5.50. 

(30)  50  bu.  Barley  @  40c. 

(31)  Produce  used   for  Household,   $13.90    (Orchard   and 

Garden,  $2.80;  Dairy,  $6.45;  Poultry,  $4.65). 
(31)      From  Phoenix  Hotel,  $7.00  for  Cream. 

Add    all   the   columns    and    prove.      The    correct   total    is 
$4,174.24. 

The  Sundry  column  is  segregated  as  follows: — 

Cash  Balance  forwarded $126.04 

Implements,  sales   60.81 

Labor  for  others 155.15 

Total    $342.00 

LESSON  10 
CASH  PAYMENTS,  SET  2 

I.  General  Instructions. 

In  principle  same  as  Lesson  7. 

II.  Written  Work. 
Enter  as  in  Lesson  7. 

March  1.  Forwarded:  Total,  $3,513.63;  Household  and 
Personal,  $1,028.90;  Trees,  $99.66;  Hired  Labor, 
$386.00 ;  General  Expenses  and  Marketing,  $269.49 ; 
Feed  and  Stock,  $427.85;  Machinery  and  Tools, 
$172.31;  Improvements  and  Repairs,  $513.20;  Sun- 
dries, $616.22. 

(1)      On  Household  Expenses,  $30.00. 

(3)  200  ft.  Lumber  @  $10.00  per  M.;  20  Posts,  $1.60;  1 
Shovel,  $1.25. 


MODIFIED   DOUBLE   ENTRY  53^ 

(7)     Strawberry  Crates,  $4.00;  Assessment  Farmers'  Tele- 
phone  Co.,    $2.00;    shod   'Trince,"   $1.50;    1{    bu. 
Timothy  Seed  @  $1.10. 
(9)     10  bu.  Rye  Seed  @  60c.;  1  Cultivator,  $25.00. 
(10)     Setting  Tire  on  Wagon,  $3.00;  half  month's  Wages  to 

Frank,  $15.00. 
(12)     Advertising  Garden  Products,  $1.20;  Membership  in 
Breeders'  Association,  $3.00;  Incubator,  $20.00. 

(14)  On  Household  Expenses,  $30.00;  Insurance,  3  years, 

$29.50. 

(15)  1  set  Plymouth  Eggs,  50c. 

(16)  2  sets  Leghorn  Eggs  @  50c.;  Dehorning  Cattle,  $3.25; 

100  lbs.  Wire  @  3c. 

(17)  Labor  on  Ditch  No.  1,  $16.50;  Labels  for  Apple  Boxes, 

$4.20;  Garden  Seeds,  $3.40. 
(19)     Carpentry  Tools,  $2.50;  Harness  Oil,  $1.00;  Bran  and 

Shorts,  $5.60;  Subscription  to  Y.  M.  C.  A.,  $5.00. 
(21)      10  lbs.  Nails  @  6c.;  Blacksmithing  as  per  bill,  $3.00; 

40  Apple  Trees  @  20c.;  10  Peach  Trees  @  25c.; 

paid  Frank  on  Wages,  $5.00 ;  5  sacks  Phosphate  @ 

$1.70. 
(24)     On  Household  Expenses,  $30.00;  Labor  in  Orchard, 

$2.00. 
(26)     Shovel  and  Hoe,  $1.50;  Allowance  for  James  at  col- 
lege, $20.00. 

(28)  1  Plowshare,  $3.20. 

(29)  Balance  Wages  to  Frank,  $10.00;  1  bbl.  Salt,  $2.50; 

2  Pigs  @  $2.25 ;  Church  Subscription,  $5.00 ;  Shin- 
gles and  Nails,  $1.00. 

(30)  Taxes,  $38.60;  paid  George  for  keeping  books,  $5.00 

(Personal  column). 

(31)  Produce   for   Household,    $13.90;   Labor   in    Garden, 

$1.20. 

Add  all  the  columns  and  prove.  The  correct  total  is 
$3,902.28. 

If  you  could  go  through  the  entire  Sundry  column  for  the 
year,  you  would  find  the  following  items:  Life  Insurance, 
$54.30 ;  Accounts  Payable,  $252.32 ;  Insurance,  $29.50 ;  Inter- 


54   -  FARM  ACCOUNTING 

est,  $230.00;  Taxes,  $38.60;  Charities,  etc.,  $94.60.  The  Im- 
provements and  Repairs  column  is  segregated  as  follows : 
Improvements,  $350.00;  Repairs,  $174.40.  The  Household 
and  Personal  column  would  be  segregated  in  the  same  manner. 
Arrange  the  segregation  as  illustrated  on  page  50. 

LESSON  11 
FINANCIAL   STATEMENT   No.   4 

I.  General  Instructions. 

Having  reached  the  end  of  our  fiscal  year,  we  are  now 
ready  to  make  a  complete  analysis  of  the  business.  First,  we 
prepare  the  financial  statement  on  Form  12,  the  same  as  in 
Lesson  8.  Then  we  analyze  the  accounts  showing  profit  or 
loss  on  Form  13. 

II.  Written  Work. 

Complete  Form  12  by  inserting  the  amounts  in  their  order. 
The  inventories  are  as  follows : — 

RESOURCES. 

Farm    $9,070.00 

Cash  and  Bank 271.96 

Stock  and  Feed 1,948.50 

Grain    380.00 

Hay 168.75 

Orchard  and  Garden 45.00 

Poultry 100.55 

Machinery  and  Implements 953.00 

Household  Goods .  682.40 

General  Expense  and  Marketing .  37.80 

Life  Insurance    1,136.80 

Total   Resources $14,794.76 

LTAHTI.ri'IES. 

Hired  Labor $35.00 

Bills  Payable 3,200.00 

Accounts   Payable 90.00 

Gifts   40.00 

Total  Liabilities 3,365.00 

The  Net  Worth  is $       (?) 

The  Net  Profit  is $       (?) 


MODIFIED   DOUBLE    ENTRY  .     55 

If  you  deduct  from  last  year's  inventory  the  value  of  House- 
hold Goods,  Life  Insurance,  Cash,  and  $2,220.00  as  the  value 
of  the  dwelling  house,  the  productive  investment  is  $6,265.64. 
Deducting  6  per  cent,  on  this  investment,  the  proprietor's 
earnings  are  $718.85.  To  this  should  be  added  the  amount 
drawn  for  personal  use. 

Accounts  Sho-H^ing  Profits  or  Loss 

Consult  illustrations,  pages  47  and  48. 

It  is  assumed  that  special  labor  and  feed  records  (Forms 
6  and  9)  have  been  kept  during  the  year,  and  we  are  now 
ready  to  analyze  our  leading  accounts  showing  profits  or 
losses.  The  first  of  these  accounts  is  Grain.  We  must  debit 
this  account  with  all  the  elements  that  enter  into  the  cost  of  its 
production,  and  credit  it  with  the  returns.  The  first  item  of 
cost  in  last  year's  inventory  (Financial  Statement,  No.  2; 
Lesson  4)  is  $377.86;  Labor  (Horse  and  Man,  from  Labor 
Record),  $440.00;  Interest  on  the  value  of  Land  devoted  to 
Grain  (56  acres  @  $55.00  per  acre),  6  per  cent.,  $184.80; 
Seeds  and  Fertilizers  (Cash  Payments),  $129.71.  The  re- 
turns are :  Present  Inventory,  $380.00 ;  Cash  Receipts,  $712.43 ; 
Fed  to  Stock  (Feed  Record  assumed),  $770.07;  Fed  to  Poul- 
try, $50.00.     From  this  we  obtain  the  net  profit,  $780.13. 

In  a  similar  manner  we  consider  the  Stock  account  and  the 
Hay  account.  The  illustrations,  pages  47  and  48,  show  the 
figures  supplied  from  each  account.  Complete  the  statement 
and  find  the  profit  or  loss  of  each  account. 

It  should  be  borne  in  mind  that  this  exercise  in  cost  account- 
ing is  only  suggestive.  The  principles  are  fundamental  and 
correct,  but  their  application  in  practice  may  vary  greatly. 
Thus,  some  farmers  will  charge  live  stock  a  certain  amount 
for  housing,  perhaps  also  for  the  use  of  utensils,  machinery, 
and  the  like ;  others  will  insist  on  deducting  the  cost  and  care 
of  the  dwelling  from  the  annual  farm  inventory,  since  this  is 
not  capital  invested  in  the  business.  For  a  full  discussion  of 
this  subject,  see  Bulletin  73,  Bureau  of  Statistics,  U.  S.  De- 
partment of  Agriculture.  The  interpretation  and  use  of  the 
results  obtained  is  a  subject  far  too  extensive  for  this  treatise. 


CHAPTER  IV 

HOUSEHOLD    ACCOUNTS 

It  will  be  seen  that  no  provision  has  been  made  in  the  gen- 
eral Cash  Book  for  separate  items  in  the  household  accounts. 
This  is  left  for  the  housekeeper.  The  fact  that  her  field  is 
somewhat  limited  from  a  business  point  of  view  is  no  argu- 
ment in  favor  of  loose  and  careless  methods  of  accounting. 

Most  housekeepers  prefer  to  receive  a  fixed  allowance  for 
household  expenses,  whenever  it  is  practicable.  For  our  pres- 
ent purpose  we  will  suppose  that  the  following  agreement  has 
been  entered  into  between  the  farmer  and  his  wife.  She  is 
to  receive  the  following : — 

Monthly  Allowances  for  Household  and  Personal  Expenses 

For  proprietor  and  wife $25.00 

Board  for  hired  help .  ; 15.00 

For  four  children 32.00 

Sundries    18.00 

Total $90.00 

In  addition  to  the  cash  allowance,  vegetables,  poultry,  and 
dairy  product^  are  furnished  from  the  farm  at  market  price. 
The  proprietor  gives  his  wife  an  allowance  of  $90.00  each 
month  either  in  one  or  in  several  payments,  and  enters  it  in 
his  cash  expenditures.  His  wife,  in  turn,  enters  her  allowance 
in  her  record.  Bills  for  furniture,  clothing,  and  utensils  are 
pasted  or  filed  in  a  Bill  and  Receipt  File  in  the  same  manner 
as  in  the  farm  accounts. 

Note  that  the  items  entered  in  columns  one  or  two  are  also 
entered  in  columns  eight,  nine,  or  ten,  since  they  are  purchases 
from  the  farm.  Because  they  are  entered  both  as  receipts  and 
payments,  they  do  not  affect  the  cash  balance. 

At  the  end  of  the  year  the  proprietor  enters  the  totals  of 
columns  one  and  two  in  his  cash  receipts  under  the  proper 

(56) 


HOUSEHOLD  ACCOUNTS  57 

headings,  and  at  the  same  time  they  are  entered  as  cash  pay- 
ments in  the  Household  column.  (See  page  44,  under  April 
30th.)  Thus,  the  farm  will  receive  full  credit  for  what  it 
sells  to  the  household  as  well  as  to  others. 

It  is  suggested  that  the  housekeeper  open  a  private  bank 
account  and  pay  large  items  by  check.  (See  April  13th,  29th, 
and  30th.)  There  are  numerous  advantages  in  keeping  a  bank 
account.  (See  page  25.)  A  bill  for  furniture,  utensils,  and 
improvements  should  always  be  taken  and  pasted  in  the  Bill 
File.  It  is  convenient  to  number  the  bills  the  same  as  the 
checks,  as  suggested  in  column  six.  Since  indorsement  by  the 
payee  constitutes  receipt,  it  is  generally  unnecessary  to  require 
a  receipt  when  payment  is  made  by  check. 

Page  60  shows  a  convenient  form  of  a  combined  household 
Cash  Book  and  Ledger.  A  summary  of  the  receipts  and  pay- 
ments is  prepared  at  the  end  of  the  year;  as  shown  on  page  62. 

Trial  Balance 

The  accuracy  of  the  work  is  tested  at  the  end  of  each  page 
or  each  month  as  follows: — 

Groceries $13.05 

Meat 11.80 

Dairy  and  Poultry 12.40 

Clothing 16.85 

Furniture  and  Utensils  . 22.05 

Help  and  Laundry 11.60 

Library    6.65 

Light  and  Fuel 6.10 

Gifts 2.35 

Personal 1.25 

Travel  and  Recreation 3.00 

Incidental    2.65 

Physician  and  Medicine 1.50 

Telephone  Rental 1.50 

Total    $112.75 

Observe  that  this  total  agrees  with  the  total  given  on 
page  61, 


58  FARM   ACCOUNTING 

Illustrative  Lessons 

LESSON  12 
HOUSEHOLD  ACCOUNTS,  SET  1 

I.  General  Instructions. 

See  illustration,  page  60.  The  columns  are  used  exactly  as 
in  Lesson  6.  Use  Forms  4  and  5.  Note  that  produce  taken 
from  the  farm  is  entered  in  both  the  receipts  and  expenditures, 
since  no  cash  is  paid  out.  The  farm  will  be  credited  with  the 
produce  at  the  end  of  the  month  or  year  in  the  farm  accounts. 

If  payments  are  made  by  check,  and  the  bills  filed,  the  items 
need  not  be  entered  in  the  Cash  Book.  The  payee,  the  amount 
of  the  check,  and  the  distribution  are  sufficient  entries. 

II.  Written  Work. 

1.  Enter  the  following  Household  Receipts  and  Expendi- 
tures for  the  month  of  April,  1908.     (See  illustration,  page  60. ) 

April  1.  Balance  forwarded,  $15.40;  on  Allowance,  $30.00; 
Shoes  for  Mabel,  $3.00;  2  Vests,  $1.00;  10  yds. 
Muslin  @  10c. ;  4  yds.  Gingham  @  15c. 

<3)  Sugar,  $1.00 ;  Raisins,  25c. ;  Subscription  to  Successful 
Farming,  $1.00;  Subscription  to  Ladies'  Home  Jour- 
nal, $1.75. 

(5)  Collection,  25c. ;  Ladies'  Aid  Society,  25c. ;  2  doz.  Eggs, 

40c.;  Medicine,  50c.;  Stove  Polish,  10c. 

(6)  Doctor,  $1.00;  Ella,  25c.;  George,  50c.;  Necktie  for 

Jim,  25c.;  5  bu.  Potatoes  @  40c.;  Skillet,  50c. 

(8)  5  Cabbages,  25c.;  Bread  Knife,  40c.;  Meat,  50c.;  Par- 

lor Lamp,  $3.00. 

(9)  3  lbs.  Crackers,  25c.;  Peanuts,  10c. ;  Eggs,  50c.;  to 

boys  for  ball  game,  50c.;  Starch,  10c. ;  Relief  So- 
ciety, 50c. 

(12)  Collection,  35c. 

(13)  Rocker,  $7.00;  Prunes,  $1.00;  on  Allowance,  $30.00; 

Coal,  $5.00 ;  Vegetables,  40c. 

(14)  Suit  for  William,  $6.00;  Hat  for  George,  75c.;  Con- 

cert, $1.00;  2  yds.  Ribbon,  40c.;  1  doz.  Plates,  $2.20; 
i  doz.  Cups  and  Saucers,  90c. 


HOUSEHOLD  ACCOUNTS  ^ 

(15)      Schoolbooks   and   Stationery,   $2.40;   Kerosene,   75c.; 

Ham,  $1.35;  Sociable,  50c.;  Shoe  Strings,  10c. 
(17)      Kitchen   Cabinet,   $6.50;  2   Chairs,   $1.30;   Laundry, 

97c.;  Toilet   Soap,  25c.;  3  lbs.  Fish,  45c.;  Towel 
.     Rack,  25c. 

(19)  Collection,  25c. 

(20)  6  yds.  Toweling,  60c.;  Tacks,  10c. ;  1  gal.  Vinegar, 

30c. ;  Matches,  25c. ;  White  House  Cook  Book,  $1.50 ; 
Carbolic  Acid,  10c. 
(23)     Telegram  to  M.   F.  &  Co.,   50c.;  Telephone  Rental, 
$1.50;  Mrs.  Sloan  for  Dressmaking,  $2.50;  Madrid 
and  return,  $2.00. 

(25)  1  pr.  Rubbers,  75c.;  Stockings  for  Ella,  50c.;  Flowers 

for  Mrs.  Knox's  funeral,  $1.00;  Allowance,  $30.00; 
Laundry,  65c.;  Lamp  Wicks,  10c. 

(26)  Collection,  25c. 

(29)  Meat,  City  Market,  as  per  bill  on  file,  $9.50;  Groceries 

at  Murdock's,  as  per  bill  on  file,  $4.40 ;  Help  for  the 
month,  $10.00. 

(30)  Vegetables  for  the  month,  $2.60 ;  Poultry,  $5.40 ;  Milk, 

Cream,  and  Butter,  $6.50. 

2.  Add  all  the  columns.  (Use  lead  pencil  until  you  have 
proved  your  work.)  If  your  work  is  correct,  you  will  find  the 
following  totals:  Receipts. — Cash,  $105.40;  Produce,  $5.25; 
Dairy  and  Poultry,  $12.80.  Payments.— Groceries,  $12.65 
(see  correction,  page  61)  ;  Meat,  $11.80;  Dairy  and  Poultry, 
$12.80;  Clothing,  $16.85;  Furniture  and  Utensils,  $22.05; 
Help  and  Laundry,  $11.60;  Library,  $6.65;  Medicine  and  Phy- 
sician, $1.50;  Light  and  Fuel,  $6.10;  Gifts,  $2.35;  Personal, 
$1.25;  Traveling  and  Recreation,  $3.00;  Incidental,  $4.15. 


LESSON  13 

HOUSEHOLD  ACCOUNTS,  SET  2 
I.     General  Instructions. 

Use  Forms  4  and  5.     In  principle  this  is  exactly  like  Les- 
son 6. 


60 


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HOUSEHOLD 


HOUSEHOLD   ACCOUNTS 


61 


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SUMMARY  OF   HOUSEHOLD  ACCOUNTS 


HOUSEHOLD   ACCOUNTS  63 

11.     Written  Work. 

Enter  as  in  Lesson  12  the  following  Household  Receipts  and 
Expenditures : — 

March  1.     Amount  forwarded,  $21.60. 

(1)  Oranges,  25c.;  James,  35c.;  Codfish,  35c.;  Allowance, 
$30.00;  Coffee,  $1.00;  Bacon,  50c.;  Shoe  Laces,  10c. ; 
Fish,  25c. ;  Veal,  10c. ;  Whalebone,  10c. ;  Stove  Pol- 
ish, 25c. 

(3)  Jardiniere,  25c.;  Collars,  25c.;  Tacks,  10c. ;  Collection, 
25c.;  Buttons,  10c. ;  Toothbrush,  25c.;  Talcum 
Powder,  25c. ;  Stamps,  25c. ;  Oranges,  25c. ;  Thread, 
15c.;  Meat,  50c.;  Crackers,  25c. 

(7)  Help,  $1.00;  Roast,  55c.;  Delineator,  10c. ;  Pepper, 
15c.;  Comb,  25c.;  Oatmeal,  25c.;  Meat,  40c. 

(9)      Collection,  25c. 
(10)     Gloves  for  Ella,  75c.;  Postage,  25c.;  Starch,  10c. 
(12)      Chops,  25c.;  Beans,  25c.;  Mustard,  20c.;  Soap,  30c.; 
Borax,    15c.;   Pattern,   45c.;   Muslin,   50c.;   Music, 
20c.;  Gasoline,  $1.20;  Picture  Frames,  $3.45. 

(14)  Starch,  25c.;  Help,  $1.00;  Laundry,  $1.00;  Allowance, 

$30.00. 

(15)  Coffee,  35c.;  Music,  25c.;  Collection  of  Poems,  $1.50. 

(16)  Collection,  25c. 

(17)  Telephone  Rental,  $1.50;  Steak,  30c.;  Rocker,  $3.75; 

Suit  for  George,  $15.00;  Skirt  Cleaned,  75c.;  Cheese, 

50c.;  Tongue,  25c.;  Thread,  10c. ;  Toothpicks,  10c. ; 

Sugar,  $1.00;  Medicine,  50c. 
(19)     Lemons,   20c.;  Lace,   15c.;  Telegram,   60c.;   Scissors 

Sharpened,  10c. ;  Flour,  $1.20;  Graham,  25c.;  Rock 

Candy,   10c. ;   Coal,   $5.00;  Powdered  Sugar,  25c.; 

Granulated    Sugar,    $1.00;    Piano    Tuned,    $5.00; 

Oranges,  25c. ;  Birthday  Present  to  Mother,  $5.00. 
(21)     Laundry,  55c.;   Help,   75c.;  Pens  and  Pencils,  10c. ; 

Hat,   $4.00;   Hooks   and   Eyes,    10c. ;   Collar,   35c.; 

Sugar,  $1.00;  Crackers,  10c. ;  Cheese,  25c.;  Mustard, 

10c. 

(23)  Collection,  25c. 

(24)  Braid,  45c.;  Fish,  15c.;  Coffee,  45c.;  Picture  of  Baby, 


64  FARM  ACCOUNTING 

$1.50;   Asbestos   Pad,   15c.;  Roast,   45c.;  Oranges, 
20c. ;  Allowance,  $30.00. 
(26)     Help,  $2.00;  Tailoring,  $1.45;  Pepper,  10c. ;  Needles, 
10c. ;  Trip  to  Boone,  $2.00;  Hats  for  George  and 
James,  $3.50. 

(28)  Ella,  $1.00 ;  Shoes  Repaired,  $1.25 ;  Flower  Seed,  25c. ; 

Braid,  15c. ;  Thread,  10c. 

(29)  Help  for  month,  $10.00;  Laundry,  $1.00. 

(30)  Collection,  35c. 

(31)  Butter,  Milk,  and  Cream  for  month,  $6.45;  Poultry 

for  month,  $4.65 ;  Vegetables  for  month,  $2.80. 

Add  all  the  columns.  The  results  should  be:  Receipts. — 
Cash,  $111.60;  Garden,  $2.80;  Dairy,  $6.45;  Sundries,  $4.65. 
Expenditures. — Groceries,  $12.75;  Meat,  $3.70;  Poultry  and 
Dairy,  $11.85;  Clothing,  $29.00;  Furniture  and  Utensils, 
$7.60;  Help  and  Laundry,  $17.30;  Books  and  Education,  $2.05; 
Physician  and  Medicine,  50c.;  Light  and  Fuel,  $6.20;  Gifts, 
$6.35;  Personal,  $1.35;  Incidental,  $13.95.     Balance  as  before. 


LESSON  14 
CONTINUED   INVENTORY 

I.  General  Instructions. 

Where  the  farmer  keeps  only  a  bank  account  and  a  detailed 
inventory,  it  is  advisable  to  keep  the  inventories  in  the  con- 
tinued form,  illustrated  on  page  17.  It  is  well,  also,  to  use 
the  first  column  for  memoranda  of  dates  of  purchase,  births, 
etc.  The  ordinary  Trial  Balance  Book,  which  may  be  pur- 
chased in  any  stationery  store,  at  a  very  reasonable  price,  is 
the  best  book  for  the  purpose. 

II.  Written  Work, 

Prepare  a  continuous  inventory  from  Statements  Nos.  1,  2, 
and  4  similar  to  the  illustration  on  page  17. 


SUPPLEMENTARY  EXERCISES  65 

Supplementary  Exercises 

To  be  assigned  at  the  discretion  of  the  instructor. 
1.     ORIGINAL  FARM  ACCOUNTS 

In  order  to  gain  additional  practice  and  confidence  in  your 
work,  you  may  now  prepare  an  original  set  similar  to  the  ones 
already  worked  out.  Study  over  the  work  already  completed, 
and  if  you  have  any  suggestions  and  criticisms  of  the  system 
of  accounts,  talk  them  over  with  your  instructor.  If  your 
suggestions  are  acceptable,  you  may  embody  the  changes  in 
this  set,  otherwise  you  will  follow  the  preceding  sets  very 
closely.  The  complete  set  must  have  at  least  five  entries  in 
each  column,  and  the  totals  should  not  be  far  from  those  in 
the  sets  already  completed.  A  higher  grade  of  work  is  ex- 
pected than  heretofore. 

Directions. 

1.  Prepare  an  inventory  similar  to  the  one  shown  on  page 
17.  The  amounts  should  be  close  to  the  results  given  in 
Lesson  1. 

2.  Write  two  months*  imaginary  entries  as  close  to  actual 
experience  as  possible.  Students  from  the  farm  should  secure 
the  material  from  home  or  from  farmer  friends. 

3.  Complete  the  year's  work  by  taking  estimates  for  the 
remaining  months. 

4.  Prepare  a  closing  inventory  for  the  end  of  the  year. 

5.  Prepare  a  statement  similar  to  the  one  given  on 
page  47. 

6.  Hand  in  your  work  with  suggestions  and  criticisms. 

2.     ORIGINAL  HOUSEHOLD  ACCOUNTS 

Prepare  an  original  household  record  on  the  same  plan  as 
the  original  farm  record.  The  totals  should  conform  approxi- 
mately with  one  of  the  months  in  the  household  summary. 

Hand  in  your  work  for  approval. 

3.     ORIGINAL  BALANCE  SHEET 

Prepare  a  balance  sheet  of  the  work  done  in  the  two  pre- 
ceding lessons,  exactly  like  the  one  you  prepared  last,  and  hand 
in  for  approval. 


66  FARM  ACCOUNTING 

4.     SHOP  ACCOUNTS 

Farm  and  shop  bookkeeping  do  not  differ  in  principle. 
They  differ  only  in  titles  of  accounts.  The  books  used  are  the 
same  as  in  the  farm  accounts,  except  special  records  adapted 
to  the  needs  of  the  shop.  The  labor  record  need  not  differ 
at  all.  Taking  the  Cash  Book  furnished  in  your  set,  note  that 
the  number  of  columns  and  the  arrangement  are  exactly  the 
same  as  in  the  farm  accounts.  Only  the  titles  of  the  columns 
are  different.  The  titles  given  below  are  self-explanatory, 
except  the  Merchandise  and  the  Supply  column.  A  large  num- 
ber of  shops  and  mills  carry  a  small  stock  of  merchandise 
which  is  sold  at  retail.  Where  this  is  done,  it  is  preferable  to 
keep  it  strictly  separate  from  the  manufacturing  end  of  the 
business.  The  shop  should  buy  from  the  store  at  regular 
prices,  and  charge  it  with  any  supplies  furnished  for  sale. 
Where  it  is  found  impracticable  to  keep  a  separate  set  of 
books,  a  column  is  provided  for  receipts  from  merchandise  sold 
and  one  for  payments  for  merchandise  purchased.  Taking 
into  account  the  inventories  at  the  beginning  and  end  of  the 
year,  these  columns  give  the  result  of  this  branch  of  the  busi- 
ness. In  the  Supplies  column  is  entered  only  consumable 
material  used  in  the  process  of  manufacture,  such  as  oil,  cotton 
waste,  sandpaper,  files,  and  the  like.  The  Sundries  column  is 
used  for  all  items  which  do  not  fall  under  any  special  column. 
For  instance,  if  interest  is  paid  on  a  note,  it  is  entered  in  the 
Total  Payments  column  and  also  in  the  Sundries  column.  It 
is  frequently  necessary  to  show  hospitality  in  closing  deals 
in  which  a  shop  of  any  consequence  is  interested.  •  Such 
entertainment  expenses  would  be  entered  in  the  Sundries 
column. 

Directions. 

1.  Head  all  the  columns  in  the  Cash  Book  as  follows: 
Under  Receipts — Merchandise,  Manufacturing.  Under  Pay- 
ments— Hardware,  Lumber,  Supplies  (Machinery  and  Tools), 
Repairs,  (Buildings  and  Improvements),  Labor,  (Freight  and 
Express),  Office,   (Light,  Fuel,  and  Power),  Merchandise. 

2.  Prepare  an  imaginary  inventory  of  a  planing  mill, 
with  $10,000.00  capital,  having  a  merchandise  inventory  of 


SUPPLEMENTARY   EXERCISES  67 

$2,000.00   consisting   of  house   fittings,  light  hardware,   etc. 
Use  the  form  illustrated  on  page  18. 

3.  Write  up  an  imaginary  month's  business  of  receipts  and 
payments,  taking  care  that  there  be  at  least  two  entries  illus- 
trating each  column.  Follow  the  plan  illustrated  on  pages 
44  and  45. 

4.  From  the  above  figures  prepare  a  probable  estimate  of 
the  year's  business. 

5.  Prepare  a  statement  similar  to  the  one  shown  on 
page  47. 

6.  Hand  in  your  work  for  approval  and  criticism. 


LESSON  15 
REVIEW   QUESTIONS 

Write  the  following  questions  and  their  answers  on  paper 
8^  X  11  inches  and  submit  to  your  teacher  for  approval: — 

1.  What  is  the  object  of  keeping  books? 

2.  What  is  the  use  of  the  Day  Book?     Prepare  a  specimen 
Day  Book  page  of  at  least  five  entries. 

3.  What  entries  are  properly  made  in  the  Day  Book? 

4.  Describe  the  Bill  and  Receipt  File  and  explain  its  use. 

5.  How  is  an  inventory  taken?     Of  what  does  it  consist? 

6.  What  are   Resources?     Liabilities?     Profits?     Losses? 

7.  What  are  Accounts  Receivable?     Accounts  Payable? 

8.  Prepare  a  specimen  Account  Receivable  and  also  a  speci- 
men Account  Payable. 

9.  What  should  determine  the  time  of  the  year  when  the 
farm  balance  sheet  is  taken? 

10.  What  are  the  disadvantages  of  single  entry? 

11.  Prepare  a  specimen  of  each  of  the  special  records  sug- 
gested on  pages  102  to  105. 

12.  Which   is  the  principal   book   in  the  second  method 
(modified  double  entry)  ? 

13.  What  is  the  value  of  the  special  column  provided  in 
the  Journal?     Suggest  columns  that  might  be  added. 

14.  How  is  each  side  of  the  Cash  Book  balanced? 

15.  How  do  you  find  the  cash  on  hand? 


68  FARM   ACCOUNTING 

16.  If  a  bank  account  is  kept,  how  do  you  find  the  cash  on 
hand  ? 

17.  Describe  how  household  accounts  are  kept. 

18.  What  allowance  for  household  besides  cash?  Why  are 
these  allowances  both  debited  and  credited  at  the  time  they 
are  entered?  How  are  these  allowances  entered  in  the  gen- 
eral Cash  Book? 

19.  How  is  the  cash  on  hand  found  in  the  household  ac- 
counts ? 

20.  Describe  how  the  Sundry  columns  are  itemized. 

21.  Of  what  three  principal  headings  does  the  financial 
statement  consist? 

22.  State  the  steps  necessary  in  preparing  the  financial 
statement. 

23.  State  some  of  the  advantages  of  banking. 

24.  What  is  meant  by  depreciation?  What  are  the.  rates 
commonly  used? 

25.  How  may  land  be  said  to  depreciate  in  value? 

26.  Describe  three  methods  of  finding  the  profit,  or  loss, 
from  live  stock.     From  different  crops. 

27.  What  is  the  principle  difl'erence  between  farm  and  shop 
accounts  ? 

28.  How  may  a  large  crop  prove  to  be  a  loss  to  the  com- 
munity? 

29.  Write  a  paragraph  pointing  out  the  importance  of 
records  for  the  farmer. 

30.  Write  a  paragraph  of  general  review  of  the  system  of 
bookkeeping  you  have  now  finished,  and  point  out  its  merits 
and  defects. 

31.  In  finding  the  actual  net  gain  or  loss  on  accounts  of 
production,  what  corrections  must  be  made? 

32.  Give  the  rule  for  finding  the  profit  or  loss  in  the  balance 
sheet. 

33.  What  is  the  distinction  between  equipment  and  sup- 
plies? 

34.  What  is  the  distinction  between  improvements  and  re- 
pairs ? 


Third  Method 


A  system  of  double  entry,  best  adapted  to  a  business  having 
a  large  number  of  personal  accounts.  The  Ledger  is  the 
basis  of  the  system ;  the  Journal  is  a  modification  of  the  Day 
Book,  containing  the  original  entries,  the  cash  account,  and 
the  classification  of  entries. 


CHAPTER  V 

DOUBLE    ENTRY 

In  a  credit  business,  where  the  titles  of  accounts  are  nu- 
merous and  where  goods  are  bought  and  sold  on  account,  it 
is  necessary  to  use  a  Ledger  instead  of  special  columns  in 
the  Cash  Book.  The  two  methods  are  often  combined  by 
carrying  the  details  of  certain  accounts  in  special  columns  in 
the  Journal  and  Cash  Book  and  posting  only  the  totals  into  the 
Ledger.  The  Ledger  is  practically  always  used  in  commercial 
bookkeeping.  The  only  essential  difference  between  commer- 
cial and  farm  bookkeeping  lies  in  the  titles  of  accounts.  The 
chief  sources  of  the  farmer's  profit  are  generally  shown  under 
crops,  live  stock,  dairy,  etc.;  that  of  the  merchant  under 
merchandise;  those  of  the  banker  under  interest,  discount, 
and  so  on.  The  principles  of  accounting  are  the  same  in 
all  cases. 

Books  and  Accounts 

The  double  entry  Journal  and  Ledger  will  be  employed  in 
this  method.  Since  it  is  designed  to  illustrate  a  variety  of 
titles,  the  expense  account  has  been  divided  into  freight, 
interest,  discount,  and  general  expense,  while  the  trading 
account  is  divided  into  grain  and  feed,  and  produce.  The 
accounts  are  further  discussed  in  Lesson  17. 

The  Joamal 

The  Journal  is  a  book  of  record  in  which  entries  are  ar- 
ranged under  debits  and  credits  in  a  convenient  form  for 
posting.  The  simplest  form  has  two  money  columns,  one 
for  debits  and  the  other  for  credits,  but  it  is  often  convenient 
to  use  special  additional  columns  for  accounts  having  frequent 
entries,  such  as  cash,  etc.,  as  illustrated  on  page  78. 

The  Ledger 

The  Ledger  is  a  book  of  record  in  which  entries  are  classi- 
fied under  separate  heads  or  titles  called  accounts.     The  left 

(70) 


DOUBLE   ENTRY  71 

side  of  the  account  shows  the  debits  and  the  right  side  the 
credits.  (See  page  77.)  A  Ledger  account  is  balanced  by 
deducting  the  smaller  side  from  the  larger,  as  shown  on  page 
82.  A  double  entry  Ledger  must  be  in  balance  at  all  times; 
that  is,  the  debits  must  equal  the  credits. 

Terms  and  Definitions 

One  object  of  this  set  is  to  familiarize  the  student  with 
terms  frequently  used  in  business.  The  following  list  of  terms 
should  be  learned  thoroughly  in  connection  with  Lessons  16 
and  17. 

Account. — A  collection  of  debits  and  credits  under  one  title, 
such  as  cash,  produce,  merchandise,  John  Jones,  etc. 

Accounts  Receivable. — Amounts  due  the  business  from 
others. 

Accounts  Payable. — Amounts  due  others  from  the  business. 

Allowances. — Amounts  paid  for  the  use  of  money  or  serv- 
ices, such  as  interest,  discount,  taxes,  etc. 

Assets. — The  property  or  capital  of  the  business. 

Balance  Sheet. — A  formal  statement  of  the  results  of  a 
business  for  a  given  period,  usually  shown  under  resources 
and  liabilities,  losses  and  gains,  net  worth  or  net  insolvency. 

Balance. — The  difference  between  the  debits  and  credits  in 
an  account. 

Bank. — A  market  for  money  and  credit;  an  institution  for 
the  safe  keeping  of  money. 

Bills  Payable. — Signed  obligations  due  others. 

Bills  Receivable. — Signed  obligations  due  the  business. 

Bookkeeping. — A  record  of  business  transactions. 

Business  Transaction. — Exchange  of  values  or  services. 

Capital. — The  amount  invested  in  a  business. 

Cash. — Money  and  negotiable  papers  payable  at  sight,  used 
as  money,  such  as  checks,  bank  drafts,  money  orders,  etc. 

Cash  Book. — A  record  of  cash  receipts  and  payments. 

Credit. — A  statement  of  obligations  by  the  business,  of  a 
gain,  or  of  goods  parted  with. 

Debit. — A  statement  of  obligations  to  the  business,  of  a  loss, 
or  of  goods  received. 

Discount. — An  allowance  paid  for  the  advance  of  money  or 
for  payment  of  bills  in  advance  of  due  date. 


72  FARM  ACCOUNTING 

Double  Entry. — A  system  of  bookkeeping  in  which  the 
debits  always  equal  the  credits,  and  in  which  accounts  are  kept 
with  persons,  things,  and  allowances. 

Draft. — An  order  of  one  party  on  a  second  to  pay  money 
to  a  third  party. 

Drawee. — The  party  who  pays  a  draft. 

Drawer. — The  party  who  issues  a  draft. 

Expenses. — Costs  of  conducting  the  business. 

Good  Will. — An  amount  which  a  business  is  assumed  to  be 
worth  above  the  net  property  assets.  It  depends  on  the  earn- 
ing capacity  of  the  business. 

Insolvency. — The  net  amount  by  which  the  liabilities  exceed 
the  assets. 

Interest, — The  amount  paid  for  the  use  of  money. 

Inventory. — A  statement  of  the  assets  and  liabilities  of  the 
business. 

Invoice. — An  itemized  statement  of  goods  bought  or  sold. 

Journal. — A  book  in  which  entries  are  arranged  under 
debits  and  credits  in  a  convenient  form  for  posting. 

Ledger. — A  book  in  which  entries  are  classified  under  sepa- 
rate heads  or  titles  called  accounts.  The  left  side  of  the 
account  shows  the  debits  and  the  right  side  shows  the  credits. 

Liabilities. — Accounts  and  obligations  due  others  from  the 
business. 

Merchandise. — Goods  bought  and  sold  for  profit. 

Payee. — The  party  to  whom  payment  is  made. 

Posting. — Entering  debits  and  credits  under  the  respective 
accounts  in  the  Ledger. 

Principal  Books. — Books  from  which  or  to  which  posting 
is.  done. 

Present  Worth. — The  excess  of  assets  above  liabilities. 

Resources. — Same  as  assets. 

Single  Entry. — A  system  of  bookkeeping  in  which  accounts 
are  kept  with  persons  only. 

Trial  Balance. — A  comparison  of  the  debits  and  credits  of 
the  Ledger  in  order  to  ascertain  their  equality. 

Voucher. — A  written  statement  or  evidence  of  a  business 
transaction. 


DOUBLE   ENTRY  73 

General  Principles 

(1)  In  the  ordinary  Journal  and  Ledger  method  of  double 
entry  bookkeeping  there  are  one  or  more  debits  and  one  or 
more  credits  involved  in  every  transaction,  and  the  debits 
always  equal  the  credits.  (2)  In  double  entry  accounts  are 
kept,  not  only  v^ith  persons,  but  also  with  property  and  allow- 
ances. 

ILLUSTRATIONS 

(a)  Smith  buys  a  Jersey  cow  for  which  he  pays  cash, 
$65.00.  Here  Live  Stock  is  debited  because  it  comes  into  our 
possession,  and  Cash  is  credited  because  it  goes  out  of  our 
possession.     (See  illustration,  page  77.) 

(6)  Smith  hands  his  wife  $30.00  for  household  use.  Here 
Household  is  debited  because  it  was  the  cause  of  an  outlay, 
and  Cash  is  credited  because  it  went  out  of  our  possession. 
The  $10.00  expended  on  crops,  page  77,  is  treated  in  a  similar 
manner. 

(c)  Smith  gold  80  bu.  Corn  for  $52.00  cash.  Here  Cagh  is 
debited  because  it  comes  into  our  possession  and  Crops  are 
credited  because  corn  goes  out  of  our  possession.  Grain 
might  have  been  used  as  the  title  of  the  account  instead  of 
Crops;  Hay,  Seed,  Fruit,  Vegetables,  etc.,  are  other  titles 
which  might  be  used,  according  as  the  farmer  desires  minute 
classification  or  more  general  accounts. 

General  Rules  for  Journalizing 

Debit   (always  left  side)  Credit  (always  right  side) 

1.     Things  that  come  into  2.     Things  that  go  out  of 

our  possession.  our  possession. 

3.     Persons    who    get    into  4.     Persons  who  get  out  of 

our  debt,  or  when  we  get  out  our  debt,  or  when  we  get  into 

of  their  debt.  their  debt. 

5.  Allowances,  when  al-  6.  Allowances,  when  al- 
lowed to  others.  lowed  to  us. 

The  General  L.a>v  of  Debit  and  Credit 

The  foregoing  rules  may  be  stated  in  the  form  of  a  general 
law,  as  follows: — 


74  FARM  ACCOUNTING 

Debit  whoever  or  whatever  causes  an  outlay  or  a  decrease 
in  assets. 

Credit  whoever  or  whatever  causes  an  income  or  an  increase 
in  assets. 

EXERCISE 

Suppose  we  have  the  following  transactions  during  the 
month  of  April,  1909,  and  we  decide  to  record  them  in  a 
Journal  and  Ledger: — 

April  1.  Bought  12  bu.  Seed  Wheat  for  cash,  $10.00; 
sold  2  tons  Clover  for  cash,  $12.00;  paid  $30.00  for 
Household  Expenses;  sold  80  bu.  Corn  @  65c. — 
$52.00. 

(5)  Bought  1  Jersey  Cow  for  cash,  $65.00. 

(6)  Sold  2  Steers  for  cash  @  $40.00. 

(7)  Sold  100  bu.  Corn  to  J.  N.   Smith  on  account  @  65c. 

Prepare  the  journal  entries.  Study  the  form  on  page  75 
and  apply  the  rules  for  journalizing. 

Posting 

Posting  is  the  transferring  of  debits  and  credits  from  other 
books  into  the  Ledger  under  individual  titles  called  accounts. 
Since  all  the  debit  items  are  found  in  the  left  money  columns 
in  the  Journal  and  all  the  credit  items  in  the  right  columns, 
ft  is  evident  that  they  should  occupy  the  same  columns  in  the 
Ledger.     Trace  the  above  entries  into  the  Ledger  on  page  77. 


DOUBLE  ENTRY 


75 


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COMMON   DOUBLE  ENTRY   JOURNAL 


76  FARM   ACCOUNTING 

Illustrative  Lessons 

LESSON   16 

JOURNALIZING 

I.  General  Instructions. 

Journalizing  is  arranging  debits  and  credits  in  a  convenient 
form  for  posting.  Use  four-column  Journal  paper.  If  this 
is  not  furnished  in  your  outfit  of  blanks,  rule  additional  col- 
umns to  correspond  with  the  illustration,  page  17.  Follow 
the  directions  and  rules  given  on  page  73.  Skip  one  line 
between  each  entry,  placing  the  date  on  this  line,  as  illustrated 
on  page  78.  All  cash  is  entered  in  the  first  two  money  col- 
umns, and  all  other  amounts  in  the  next  two  columns.  Copy 
the  opening  paragraph  in  the  explanation  column.  The  Day 
Book  part  is  written  first  and  the  Ledger  titles  immediately 
below,  as  illustrated.  Many  bookkeepers  post  without  jour- 
nalizing, directly  from  the  invoice  or  Day  Book,  but  for  the 
beginner  it  is  preferable  to  use  the  Journal.  • 

II.  Written  Work. 

Following  are  extracts  from  your  Day  Book,  as  produce 
merchants,  which  you  will  now  journalize: — 

June  1,  1910. 
Student  (write  your  name)  and  Edward  Harvey  have  this 
day  formed  a  copartnership  under  the  firm  name  of  Student 
&  Harvey,  for  the  purpose  of  conducting  a  feed  and  produce 
business  at  Auburn,  111.  Each  partner  invests  $3,000.00  cash. 
The  profits  and  losses  are  shared  equally.  The  student  is  to 
receive  $100.00  a  month  for  his  services  and  Mr.  Harvey 
$80.00  a  month.  The  student  is  a  skilled  accountant  and  will 
have  general  charge  of  the  oflfice.  (Write  the  opening  entry 
in  the  Journal  as  illustrated  on  page  18.) 

(1)  Each  partner  has  paid  his  investment.  (Dr.  Cash; 
Cr.  each  partner.  Rules  1  and  4,  page  73.)  De- 
posit $6,000.00  in  the  First  National  Bank.  Keep 
a  special  bank  account,  as  illustrated  on  page  26. 
No  entry  of  deposits  is  required  in  the  Journal. 


DOUBLE  ENTRY 


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DOUBLE  ENTRY  LEDGER 


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FARM  ACCOUNTING 


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DOUBLE   ENTRY  79 

Deposit  all  cash  as  it  comes  in  and  make  all  pay- 
ments by  check. 

(2)  Bought  store  and  fixtures  of  Wm.  Hayward  &  Co.,  110 

W.  Green  St. :  Building  and  Lot,  $2,000.00 ;  Fur- 
niture and  Fixtures,  $500.  Paid  (check  No.  1) 
$1,000.00;  gave  our  note,  due  in  60  days,  for  the 
balance.  (Dr.  Real  Estate,  and  Furniture  and  Fix- 
tures; Cr.  Cash  and  Bills  Payable.  Rules  1  and 
2,  page  73.) 

(3)  Rented   store  room,  No.   9   Canal  St.,  for  $40.00  a 

month.  Paid  one  month  in  advance.  (Dr.  Ex- 
pense; Cr.  Cash.  The  expense  account  is  some- 
times divided  into  Rent,  Salaries,  Light  and  Fuel, 
etc.,  but  here  the  expense  account  includes  all  such 
items.) 

(4)  Bought  of  Willard  Johnson,  Ames,  Iowa,  on  account: 

20  tons  Timothy  Hay  @  $15.00;  25  tons  Prairie 
Hay  @  $12.00.  (Dr.  Grain  and  Feed;  Cr.  Willard 
Johnson.)  Paid  freight  on  above,  $85.00.  (Dr. 
Freight;-  Cr.  Cash.)  Sold  to  Richard  Morris,  340 
W.  10th  St.,  on  account:  10  tons  Timothy  Hay  @ 
$18.00.   (Dr.  Richard  Morris;  Cr.  Grain  and  Feed.) 

(5)  Sold  to  John  Rollins,  432  E.  5th  St.,  on  account:     5 

tons  Prairie  Hay  @  $15.00. 

(6)  Paid  Willard  Johnson  for  invoice  of  June  4.     Bought 

of  Winkle  Elevator  Co.,  Bancroft,  Iowa:  1  car 
Wheat,  997  bu.  @  97c.;  1  car  Barley,  830  bu.  @ 
51c.;  1  car  Corn,  1,073  bu.  @  69c.  (Freight  pre- 
paid; Dr.  Grain  and  Feed;  Cr.  Winkle  Elevator 
Co.) 

(8)  Received  cash  of  Richard  Morris,  on  account,  $100.00. 

(9)  Sold  to  Star  Milling  Co.,  Detroit,  Mich.,  on  account: 

500  bu.  Wheat  @  99c.  Received  of  John  Rollins 
his  note,  due  in  10  days,  payable  at  Citizens'  Na- 
tional Bank,  in  full  of  his  account;  interest,  6  per 
cent. 
(10)  Bought  of  Horton,  Brown  &  Co.,  Spring  Valley,  Iowa, 
on  account:  1,500  doz.  Eggs  @  21c.;  500  lbs.  But- 
ter @  27ic.;  100  lbs.  Y.  A.  Cheese  @  15c.     Paid 


80  FARM   ACCOUNTING 

Freight  on  above,  $3.50.  Paid  Cramer  &  Co.  for 
Office  Supplies,  $15.00.  (Dr.  Expense;  Cr.  Cash.) 
Sold  to  Hotel  Emery,  on  account,  90  doz.  Eggs  @ 
25c. 

(11)  Accepted  Horton,  Brown  &  Co.'s  draft  on  us  in  favor 

of  Richard  &  Lytton,  at  3  days'  sight,  payable  at 
Citizens'  National  Bank,  for  amount  of  invoice  of 
June  10.  (Dr.  Horton,  Brown  &  Co.;  Cr.  Bills 
Payable.)  Sold  to  Western  Produce  Co.,  Chicago, 
on  account :  900  doz.  Eggs  @  25c. ;  300  lbs.  Butter 
@  29c. 

(12)  Paid  Winkle  Elevator  Co.,  on  account,  $1,000.00. 

(13)  Sold  to   Chicago   Malting   Co.,   on   account,   415  bu. 

Barley  @  60c.  Received  remittance  from  Star 
Milling  Co.,  in  full  of  invoice  of  June  9. 

(15)  Paid  our  acceptance  of  June  11,  due  to-day.     Gave 

Winkle  Elevator  Co.  our  note  at  30  days,  payable 
at  First  National  Bank,  for  balance  of  account. 

(16)  Gave   Edward   Harvey  a   check   of   $100.00    for  his 

private  use.     (Dr.  Edward  Harvey;  Cr.  Cash.) 

(17)  Sold  to  Empire  Livery,  on  account,  300  bu.  Corn  @ 

75c. 

(18)  Sold  to  G.  W.  Gardner,  for  cash,  25  bu.  Corn  @  74c. 

(Dr.  Cash;  Cr.  Grain  and  Feed.) 

(19)  Received  cash  of  John  Rollins  for  his  note  due  to-day, 

with  interest  at  6  per  cent.  (Dr.  Cash;  Cr.  Bills 
Receivable  and  Interest.) 

(20)  Sold  to  Henry  Simmons'  Sons  300  bu.  Barley  @  60c. 

They  paid  $100.00,  balance  on  account.  (Dr.  Henry 
Simmons'  Sons,  $80.00,  Cash,  $100.00;  Cr.  Grain 
&  Feed,  $180.00.) 

(22)  Sold  to  Condon  Construction  Co.,  on  their  60-day  note : 

10  tons  Prairie  Hay  @  $12.25 ;  10  tons  Timothy  @ 
$15.00;  300  bu.  Corn  @  75c. 

(23)  Student  renders  an  itemized  bill  for  small  expense 

items  paid  in  cash  as  follows:  Stationery,  $3.25; 
Collections  and  Exchange,  $3.40;  Entertainment, 
$5.40;  Postage,  $3.00;  Telegram,  $1.75;  total  of 
Check,  $16.90.     (Dr.  Expense;  Cr.  Cash.) 


DOUBLE   ENTRY  81 

(24)  Paid  for  6  tons  Coal  @  $4.00,  for  use  in  store. 

(25)  Sold  to  Hotel  Emery,  on  account:     50  doz.  Eggs  @ 

25c. ;  105  lbs.  Butter  @  30c. 

(26)  Bought  of  Iowa  Produce  Co.,  on  account:     100  boxes 

Gano  Apples  @  $2.50;  100  boxes  Mo.  Pippins  @ 
$2.25 ;  50  boxes  Winesaps  @  $3.50 ;  25  crates  Pine- 
apples @  $1.75.     Paid  Freight  on  above,  $11.30. 

(27)  Prepaid  our  note  in  favor  of  Wm.  Hayward  &  Co., 

given  June  2,  for  which  they  allow  a  discount  of  6 
per  cent,  to  maturity — 35  days.  (Dr.  Bills  Pay- 
able; Cr.  Cash  and  Discount.) 

(29)  Sold  to  H.  E.  Johnson,  27  Canal  St.,  on  account:     25 

doz.  Eggs  @  25c. ;  50  lbs.  Cheese  @  17c. 

(30)  Credit  each  partner  with  his  salary  as  per  articles  of 

copartnership.  (Dr.  Expense;  Cr.  each  partner.) 
Paid  monthly  dues  and  expenses  as  follows :  Tele- 
phone Rental,  $3.00;  Commercial  Club,  $5.00;  Pay 
Rolls  for  June,  $150.00;  Water  Rent,  $4.00.  (Dr. 
Expense;  Cr.  Cash,  four  checks.) 

Now  add  all  the  columns  of  the  Journal  and  see  if  the  sum 
of  the  two  debit  columns  equals  the  sum  of  the  two  credit 
columns.     The  cash  balance  should  be  $1,938.67. 


LESSON  17 

POSTING 
I.     General  Instructions. 

As  explained  on  page  72,  posting  consists  of  transferring 
debits  and  credits  from  other  books  into  the  Ledger.  The  left 
half  of  the  Ledger  page  is  devoted  to  the  debits  and  the  right 
half  to  the  credits.  Every  amount  found  in  the  Journal  debit 
columns  must  be  found  on  the  debit  side  of  the  Ledger  (either 
in  individual  items,  or  in  totals)  under  the  appropriate  ac- 
count; and  all  credit  items  in  the  Journal  must  be  found  on 
the  credit  side  of  the  Ledger.  It  is,  therefore,  evident  that 
since  the  Journal  balances,  the  Ledger  will  also  balance,  if  the 
work  is  correct. 


82 


FARM    ACCOUNTING 


DOUBLE  ENTRY   LEDGER 


DOUBLE   ENTRY  83 

II.     Written  Work. 

1.  Study  very  carefully  page  82  and  note  how  the  titles 
are  written.  Note  that  the  cash  items  in  the  Journal  are 
not  posted  separately,  but  only  the  totals  at  the  end  of  the 
month. 

2.  Take  three  sheets  of  Ledger  paper  and  number  the 
pages  from  1  to  6.  On  the  first  page  give  one  fifth  page  to 
each  of  Student,  Edward  Harvey,  Cash,  Real  Estate,  and  Fur- 
niture and  Fixtures;  page  2,  give  equal  space  to  Grain  and 
Feed,  and  Produce;  page  3,  equal  space  to  Bills  Receivable, 
Bills  Payable,  Expense,  Freight,  Interest  and  Discount;  pages 
4  to  6,  one  fifth  page  to  each  personal  account  as  they  occur. 

3.  You  are  now  ready  to  post.  Place  the  Ledger  to  your 
right  and  the  Journal  to  your  left.  Turn  to  Student's  account 
and  in  the  date  column  write  July  1,  1910;  in  the  folio  column, 
1  (meaning  that  the  entry  is  found  on  page  1  in  the  Journal)  ; 
in  the  amount  column,  $3,000.00.  Now  write  1  to  the  left  of 
your  name  in  the  Journal,  indicating  that  the  amount  is 
posted  on  the  first  page  of  the  Ledger.  This  is  very  impor- 
tant. Next  turn  to  Edward  Harvey  and  post  this  item  in  the 
same  manner.  In  the  same  way  proceed  with  all  the  credit 
items.  The  last  item  to  be  posted  is  the  total  credit  of  cash, 
$5,016.45,  under  June  30.  The  numbers  in  the  folio  columns 
will  be  the  same  until  new  pages  are  turned.  The  number 
opposite  the  entry  in  the  Journal  is  always  the  page  of  the 
Ledger  on  which  the  account  appears.  Add  the  totals  of  the 
Ledger  accounts  and  observe  that  the  grand  total  equals 
the  total  of  the  credit  columns  of  the  Journal. 

4.  Proceed  in  exactly  the  same  manner  with  posting  the 
debit  entries  and  prove  your  work  the  same  as  the  credits. 
If  the  debit  and  credit  postings  are  equal,  your  work  is  prob- 
ably correct,  though  amounts  may  have  been  posted  to  the 
wrong  account.  Such  errors  could  not  be  detected  except  by 
checking. 

5.  Observe  that  several  accounts  balance,  such  as  Horton, 
Brown  &  Co.,  Willard  Johnson,  and  others.  Draw  a  red  line 
across  the  money  columns  under  the  last  amount  on  both  sides 
of  all  accounts  which  balance.  Accounts  having  a  number  of 
entries   on  either   or  both   sides   should  be  totaled  and   the 


84  FARM   ACCOUNTING 

amount  written  under  the  respective  columns  in  very  light 
pencil  figures.     You  are  nov^  ready  to  take  the  trial  balance. 

LESSON   18 
THE   TRIAL   BALANCE 
I.,     General  Instructions. 

The  trial  balance  is  taken  for  the  purpose  of  discovering 
whether  the  Ledger  is  in  balance  or  not;  that  is,  if  the  debits 
equal  the  credits.  It  may  be  taken  either  by  using  the  totals 
of  the  debits  and  credits  of  each  Ledger  account  or  by  taking 
the  difference  between  the  two  sides.  The  latter  method  has 
several  advantages.  Both  methods  should  be  used  if  there  is 
any  difficulty  in  getting  the  balance.  The  only  satisfactory 
rule  for  discovering  errors  in  the  trial  balance  is  the  follow- 
ing:    Check  all  the  work. 

IL     Written  Work. 

Take  a  sheet  of  Journal  paper  and  write  the  page,  title, 
and  balance  of  all  the  accounts  in  the  Ledger,  except  those 
which  balance,  as  follows : — 

THIAL     BALA.NCK,    .ll'XE     ;;0,     1910 

1         Student ? 

1         Edv^ard  Harvey ? 

1         Cash    ? 

1         Real  Estate ? 

etc.,  etc 

Total  $7,913.38  $7,913.38 

LESSON   19 
THE    BALANCE    SHEET 

I.     General  Instructions. 

The  balance  sheet  consists  of  two  statements:  one  showing 
the  losses  and  gains,  the  other  showing  the  resources  and 
liabilities.  These  statements  consist  of  the  items  found  in 
the  trial  balance  and  of  the  inventories.  Having  completed 
the  trial  balance  and  inventories,  the  books  are  not  needed 
further  in  preparing  the  balance  sheet.     Losses  or  gains  are 


DOUBLE   ENTRY 


85 


generally  found  in  accounts  of  allowances  and  property  in 
which  we  deal,  or  which  show  a  rise  or  fall  in  value ;  resources 
and  liabilities  are  generally  found  in  accounts  representing 
property  and  persons.  Resources  appear  on  the  debit  side; 
liabilities  and  gains,  on  the  credit  side. 

II.     Written  Work. 

1.  The  first  step  is  to  take  an  inventory.  This  consists  of 
property  on  hand,  including  Grain  and  Feed,  Produce,  Fur- 
niture and  Fixtures,  and  ReaJ  Estate.  Going  through  the 
stock  we  find: — 


GRAIN    AND    FEED 

748  bu.  Corn  @  69c. 
115  bu.  Barley  @  51c. 
497  bu.  Wheat  @  97c. 
10  tons  Prairie  Hay  @  $12.00 


PRODUCE 

435  doz.  Eggs  @  21c. 

95  lbs.  Butter  @  27ic. 

50  lbs.  Cheese  @  15c. 

25  crates  Pineapples  @  $1.75 
100  boxes  Ganos  @  $2.50 
100  boxes  Pippins  @  $2.25 

50  boxes  Winesaps  @  $3.50 


Real  Estate  and  Office  Fixtures  at  cost  value.     Prepare  the 
inventory  as  illustrated  on  page  20. 

2.  Going  through  the  trial  balance  we  find  that  the  fol- 
lowing accounts  represent  losses  or  gains  (fill  in  the 
amounts)  : — 


LOSSES    AND    GAINS 


Expense  .  .  . 
Freight  .  . .  , 
Student  (1) 
Harvey  (1)  . 

Total 


?     Grain  and  Feed  (2)  . 

?     Produce  (2) 

?     Int.  and  Discount .  .  . 


Total 


(1)  The  difference  between  the  two  sides,  usually  written  in 
red  ink;  (2)  is  found  by  subtracting  the  amount  in  the  trial 
balance  from  the  inventory. 

3.  Since  the  loss  and  gain  account  is  made  up  only  at  the 
end  of  the  balance  period,  it  should  always  be  closed  and  the 
balance  transferred  to  the  proprietor's  accounts.' 


86  FARM   ACCOUNTING 

4.     The  resources  and  liabilities  are  as  follows  (insert  the 
figures  and  total)  : — 

RESOURCES    AND    LIABILITIES 

Cash   ?     Robert  Morris  .....  ? 

Real  Estate ?     Henry  Simmons  Co. .  ? 

Fur.  and  Fixtures .  .  ?     Western  Produce  Co.  ? 

Grain  and  Feed  (In-  Bills  Payable ? 

ventory) ?     Iowa  Produce  Co. ...  ? 

Produce  (Inventory)  ?     Student ? 

Bills  Receivable  ....  ?     Edward  Harvey ....  ? 

Chicago  Milling  Co. .  ? 

Empire  Livery ? 

Hotel  Emery ? 

H.E.Johnson ? 


Total $7,964.01         Total $7,964.01 


LESSON  20 
CLOSING   THE   LEDGER 

I.  General  Instructions. 

The  object  of  closing  the  Ledger  is  to  balance  the  loss  and 
gain  accounts  and  to  bring  the  final  net  gain  or  net  loss  into 
the  partners'  accounts  and  thus  leave  only  the  accounts  show- 
ing resources  and  liabilities  open  for  the  next  balance  period. 
The  balance  sheet  furnishes  a  perfect  guide  as  to  the  accounts 
to  be  closed.  All  the  accounts  represented  in  the  loss  and 
gain  statement  must  be  closed.  Accounts  showing  resources 
and  liabilities  are  not  closed,  but  any  account  may  be  balanced 
if  it  contains  a  sufficient  number  of  entries  to  justify  it.  Bal- 
ancing an  account  consists  of  canceling  equal  amounts  from 
both  sides  of  the  account,  ruling  it,  and  bringing  down  the 
balance  on  the  proper  side  below  the  ruling. 

II.  Written  Work. 

With  the  balance  sheet  before  you,  turn  to  the  Grain  and 
Feed   account   in  the   Ledger.     Enter  the   inventory  on   the 


DOUBLE   ENTRY  87 

credit  side,  as  illustrated  on  page  82.  The  difference  between 
the  diebits  and  credits  is  now  $537.60,  or  the  gain  on  this 
branch  of  the  business.  Enter  this  on  the  smaller,  or  debit, 
side,  then  rule  the  account  as  illustrated  on  page  82.  (The 
ruling  may  be  done  in  red  or  black  ink  as  desired.)  Note  that 
the  ruling  appears  on  the  same  blue  line  on  both  sides  of  the 
account,  even  if  there  are  more  entries  on  one  side  than  on 
the  other.  The  single  line  crosses  the  money  column  only; 
the  double  line  crosses  all  except  the  explanation  columns. 
Next  bring  down  the  inventory  on  the  debit  side  below  the 
ruling.  The  reason  for  this  is  that  having  entered  it  on  the 
credit  side  temporarily,  in  order  to  show  the  proper  gain,  it 
must  also  be  entered  on  the  debit  side  in  order  to  restore  the 
balance  of  the  Ledger.  Proceed  in  the  same  manner  with  the 
remaining  loss  and  gain  accounts,  except  that  where  there  is 
no  inventory  the  account  is  closed  as  it  stands  in  the  Ledger. 
Next  enter  half  of  the  net  gain,  shown  in  the  loss  and  gain 
statement,  on  the  credit  side  of  each  partner's  account.  Close 
the  account  as  illustrated  on  page  82  and  bring  down  the 
present  worth.     This  completes  closing  the  Ledger. 

Note  carefully  the  steps  leading  up  to  closing  a  set  of 
books : — 

1.  The  trial  balance. 

2.  The  balance  sheet. 

3.  Closing  the  Ledger. 

Never  rule  an  account  until  the  trial  balance  and  balance 
sheet  are  known  to  be  correct. 

LESSON   21    (Optional) 
ORIGINAL  ENTRY   LEDGER 

L     General  Instructions. 

It  was  stated  on  page  76  that  it  is  not  necessary  to  jour- 
nalize, but  that  it  is  very  helpful  in  order  to  avoid  mistakes. 
Most  business  men  prefer  the  Journal  and  Cash  Book  for  the 
original  entries.  The  difficult  thing  to  carry  out  in  practice 
without  journalizing  is  to  post  every  entry  tivice,  on  both  the 
debit  and  the  credit  sides.     Thus,  when  a  sale  of  grain  is  made 


88  FARM   ACCOUNTING 

for  cash,  cash  is  debited  and  grain  is  credited,  according  to 
the  rules  of  journalizing.  Since  the  full  explanation  is  writ- 
ten in  the  Ledger,  it  is  best  to  use  the  ordinary  Day  Book 
form  as  illustrated  on  page  22  and  used  in  Lesson  3. 

IL     Written  Work. 

On  two-column  Journal  paper  open  the  same  accounts  as  in 
Lesson  3  and  post  the  transactions  in  Lesson  16  directly  into 
the  accounts,  as  illustrated  on  page  22.  The  result  will  be 
exactly  the  same  as  given  in  Lesson  17.  It  will,  therefore,  bo 
unnecessary  for  you  to  prepare  the  statements  and  close  the 
Ledger.  The  trial  balance  must  be  taken,  however,  same  as 
heretofore. 


PART   li 
COST  ACCOUNTS  AND  SPECIAL  RECORDS 


COST  ACCOUNTS  AND  SPECIAL  RECORDS 

CHAPTER  VI 

COST    OF    PRODUCTION 

Too  often  a  good  farm  is  compelled  to  carry  unprofitable 
experiments  and  the  whole  business  is  pronounced  a  failure 
without  an  adequate  attempt  to  find  a  remedy.  In  addition  to 
the  foregoing  records  (Second  Method),  Mr.  Harris  has  kept 
accurate  cost  accounts  of  the  main  branches  of  his  business. 
In  cost  accounting  there  are  four  principal  elements  to  con- 
sider: Cost  of  material,  labor,  interest,  and  depreciation. 
The  cost  records  are  independent  of  all  the  rest  and  may  be 
kept  of  every  branch  of  the  business,  if  desired,  or  limited  to 
one  or  more  phases.  In  this  instance  cost  records  have  been 
kept  of  live  stock,  grain,  hay,  dairy  products,  and  improve- 
ments. The  Agricultural  Experiment  Stations  are  always 
willing  to  give  the  farmer  important  advice  and  assistance 
regarding  the  stock,  grain,  fruit,  etc.,  best  adapted  for  differ- 
ent localities  and  purposes.  But  conditions  frequently  arise 
where  it  is  important  for  the  farmer  to  carry  on  his  own 
experiments.  Your  own  Experiment  Station  will  doubtless 
be  glad  to  cooperate  and  suggest  methods  for  carrying  on  such 
experiments  even  to  the  extent  of  furnishing  necessary  blanks 
and  material.  Important. bulletins  on  the  subject  may  be  had 
for  the  asking  from  the  Department  of  Agriculture,  Wash- 
ington, D.  C. 

The  following  announcement  in  the  Crop  Reporter  for  May, 
1908,  indicates  what  the  government  is  doing  in  this  direc- 
tion : — 

**  Cost  of  Producing  Farm   Products" 

"The  Bureau  of  Statistics  is  making  an  investigation  of  the 
cost  of  producing  farm  products  in  different  parts  of  the 
United  States.     Blank  forms  have  been  printed  upon  which 

(91) 


92  COST   ACCOUNTS   AND   SPECIAL   RECORDS 

to  make  reports,  and  this  Bureau  desires  to  receive  the  names 
of  such  farmers  as  have  kept  records  of  cost  of  producing 
crops,  or  are  well  informed  upon  the  subject  of  cost  of  crop 
production  in  their  locality,  in  order  that  blank  schedules  may 
be  sent  to  them  to  fill  in.  Individual  reports  will  not  be  pub- 
lished— only  the  average  of  many  reports.  Names  should  be 
sent  to  the  Bureau  of  Statistics,  Department  of  Agriculture, 
Washington,  D.  C." 

Every  farmer  should  avail  himself  of  this  important  free 
service.  ''Keeping  posted"  is  one  of  the  characteristics  of 
the  progressive  and  successful  farmer.  There  are  three  ex- 
ceptionally valuable  bulletins  on  the  subject  which  ought  to 
be  in  the  library  of  every  farmer :  U.  S.  Department  of  Agri- 
culture, Bureau  of  Statistics,  Bulletin  No.  48,  and  University 
of  Minnesota,  Agr.  Ex.  Station,  Bulletins  Nos.  73  and  97. 

Cost  of  Live  Stock 

Either  of  three  methods  may  be  employed  in  finding  the  cost 
of  live  stock: — 

First  Method. — Ascertain  exactly  the  total  amount  of  grain, 
hay,  and  roughage  on  hand  at  the  beginning  of  the  year,  and 
produced  during  the  year.  From  this  subtract  the  quantity 
sold,  including  amount  used  by  household  and  for  seed,  and 
the  amount  on  hand  at  the  end  of  the  year.  The  difference  is 
the  quantity  used  for  live  stock.  The  value  at  market  prices 
is  the  expenditures  of  feed  for  live  stock. 

Find  the  total  amount  received  for  dairy  products,  including 
amount  used  by  the  household.  The  difference  between  the 
cost  and  the  receipts  is  the  gain.  The  disadvantages  of  this 
method  are  that  no  account  is  taken  of  individual  animals  nor 
of  different  kinds  of  stock.  The  herd  as  a  whole  may  be  a 
paying  investment  and  still  there  may  be  individual  animals 
carried  at  a  loss.  It  is  desirable  that  such  records  be  kept,  at 
least  occasionally,  as  will  enable  the  farmer  to  eliminate  un- 
profitable animals. 

Second  Method. — The  following  actual  record  of  a  dairy 
herd  of  twelve  cows  illustrates  a  much  more  satisfactory  test 
than  the  preceding.  Individual  record  was  kept  of  the  milk 
produced  by  each  cow,  but  the  feed  was  weighed  for  the 


COST   OF   PRODUCTION  93 

entire  herd,  and  the  average  cost  charged  to  each  animal  at 
market  prices. 

Tests  of  Dairr  Herd  for  March.   1909 


No. 
Cow. 

Lbs.  Milk 
for  Mo. 

*Test. 

Lbs.  Fat. 

Val.  at  36c. 

Cost  of  Feed. 

Net  Profit. 

1 

465 

4.5 

20.93 

$7.53 

$6.21 

$1.32 

2 

372 

5.0 

18.60 

6.70 

6.21 

.49 

3 

620 

5.0 

31.00 

11.16 

6.21 

4.95 

4 

372 

7.0 

26.04 

9.37 

6.21 

3.16 

5 

496 

4.8 

23.80 

8.57 

6.21 

2.36 

6 

682 

4.7 

32.05 

11.54 

6.21 

5.33 

7 

558 

4.4 

24.55 

8.44 

6.21 

2.23 

8 

620 

4.1 

25.42 

9.15 

6.21 

2.94 

9 

496 

4.2 

20.83 

7.50 

6.21 

1.29 

10 

651 

4.9 

31.90 

11.48 

6.21 

5.27 

11 

558 

5.0 

27.90 

10.04 

6.21 

3.83 

12 

589 

5.0 

29.45 

10.60 

6.21 

4.39 

*  These  figures  were  obtained  by  the  Babcock  test,  which  is  described  in  every  modern 
work  on  dairyinpr.      It  may  be  seen  in  any  creamery. 

Keed  for  the  Month  of  March 

Hay,  4,900  lbs.  @  $9.00  per  ton $22.05 

Kale,  9,600  lbs.  @  $2.50  per  ton 12.00 

Bran,  1,800  lbs.  @  $30.00  per  ton 27.00 

Shorts,  900  lbs.  @  $30.00  per  ton 13.50 

Total    $74.55 

$74.55  divided  by  12  equals  $6.21,  average  cost  of  feed. 

With  this  average  before  him,  a  careful  feeder  will  be  able 
to  make  mental  corrections  for  each  individual  animal,  accu- 
rate enough  for  most  practical  purposes.  The  milk  record  has 
been  kept,  as  illustrated  on  page  102. 

Third  Method. — The  difference  between  the  second  and  third 
methods  is  that  in  the  latter  accurate  records  are  kept  of  indi- 
vidual feed  rations,  while  in  the  second  method  an  average  is 
taken.  The  error  resulting  from  averaging  the  feed  between 
all  the  animals  in  a  large  herd  may  be  such  as  to  unduly  favor 
certain  animals  and  do  injustice  to  others.  The  only  abso- 
lutely accurate  method  is  to  keep  an  account  with  each  animal, 


94  COST   ACCOUNTS   AND   SPECIAL   RECORDS 

at  least  with  such  animals  as  show  a  tendency  to  be  unprofit- 
able. Page  97  shows  an  individual  account  with  one  of  the 
milch  cows  on  the  Harris  farm.  It  is  arranged  on  the  regular 
Ledger  form.  Opposite  pages  of  the  Day  Book  may  also  be 
used.  The  detailed  information  regarding  feed,  milk,  labor, 
etc.,  is  found  in  the  respective  records,  illustrated  on  pages 
102  and  103.  Similar  accounts  are  kept  of  each  animal, 
tested  preferably  during  the  entire  lactation  period.  It  is 
only  in  this  way  that  the  careful  farmer  can  determine 
whether  each  animal  is  kept  at  a  gain  or  a  loss.  The  weeding 
out  of  one  or  two  unprofitable  animals  a  year  will  pay  for  the 
labor  of  keeping  the  cost  records  many  times  over. 

Extension  Bulletin  No.  3,  Iowa  State  College,  says  on  this 

subject : — 

>. 

"There  are  a  variety  of  diflferent  methods  used  among  suc- 
cessful dairymen  for  securing  records  of  their  cows.  When 
accurate  records  are  imperative  it  is  necessary  to  weigh  and 
sample  each  cow's  milk  at  each  milking.  For  all  practical 
purposes,  however,  it  is  not  necessary  to  weigh  and  sample  the 
milk  from  each  cow  oftener  than  twice  a  day  for  three  days  of 
each  month.  Usually  samples  are  taken  on  the  first,  tenth, 
and  twentieth  of  each  month,  thereby  making  six  milk  weights 
on  the  record  sheet  and  six  separate  samples  of  milk  which 
have  been  placed  in  a  sealed  jar  bearing  the  cow's  name. 

''Directions. 

''1.  Arrange  the  scales,  milk  sheet,  sample  jars,  and 
sampler  in  a  convenient  place  behind  the  cow  stalls. 

"2.  Put  at  least  one  preservative  tablet  in  each  jar  in- 
tended for  a  composite  sample.  Be  sure  to  place  the  remain- 
ing tablets  where  children  cannot  get  them,  as  they  are 
poisonous. 

"3.  Weigh  the  milk  from  each  cow  separately  and  record 
the  amount  on  the  record  sheet. 

"4.  Use  a  reliable  sampler,  or  if  one  is  not  at  hand  use  care 
in  mixing  the  milk  by  pouring  from  pail  to  pail  before  taking 
out  a  sample  with  a  small  dipper.     This  is  important. 


COST   OF   PRODUCTION  95 

"5.     Keep  the  bottles  where  the  children  cannot  get  at  them, 
as  the  preservative  is  poisonous. 


"After  summing  up  the  weights  of  milk  from  one  cow  for 
the  three  days  of  the  month  you  have  the  total  pounds  of  milk 
for  an  average  three  days.  Divide  the  sum  by  3  and  you  have 
the  average  for  one  day,  which  multiplied  by  the  number  of 
days  in  the  month  will  give  the  monthly  yield.  It  is  not  ex- 
pected, nor  is  it  essential,  that  these  records  be  accurate  to  a 
pound  in  ordinary  dairy  herds.  When  the  milk  is  tested  with 
the  Babcock  machine  the  result  is  read  as  per  cent,  of  butter 
fat, — as  3.7  per  cent,  or  4.3  per  cent.  This  indicates  that  there 
are  3.7  pounds  or  4.3  pounds  of  butter  fat  in  100  pounds  of 
milk.  Multiplying  the  weight  of  the  cow's  milk  for  the  month 
by  the  test  the  result  indicates  the  pounds  of  butter  fat  which 
the  cow  has  produced  for  the  month.     At  the  end  of  the  year 


96  COST   ACCOUNTS  AND   SPECIAL   RECORDS 

it  is  a  simple  matter  to  add  together  the  twelve  monthly 
records  of  butter  fat.  Multiply  the  sum  of  these  weights  by 
the  price  per  pound  and  the  result  indicates  the  value  of  the 
product.  The  record  for  each  member  of  the  herd  can  be  thus 
worked  out.  A  study  of  these  records  shows  the  comparative 
value  of  the  various  cows  in  the  herd. 

"In  order  to  know  whether  the  cow  is  paying  a  profit  or  not 
the  owner  must  have  a  definite  idea  of  how  much  feed  she  has 
consumed  in  making  this  product.  Knowing  this,  the  actual 
values  of  all  the  cows  are  easily  determined.  On  dairy  farms 
where  the  hand  separator  is  used  it  is  safe  to  charge  a  cow  for 
food  only  while  in  milk.  The  skim  milk  will  usually  pay  for 
the  cow's  board  while  dry,  and  the  calf  and  manure  should 
more  than  pay  for  the  labor  it  takes  to  care  for  her.  Why  not 
milk  fewer  cows  and  make  more  money?" 

Cost   of    Crops 

The  principles  laid  down  in  respect  to  the  cost  of  animal 
products  hold  true  also  for  the  cost  of  farm  crops.  Two  meth- 
ods suggest  themselves :  Accounts  with  the  various  crops  and 
accounts  with  the  different  fields.  Either  method  requires  de- 
tailed records  of  the  labor,  seed,  fertilizer,  etc.,  expended  on 
the  crop  and  of  returns  not  only  for  cash  sales,  but  for  prod- 
ucts used  by  the  household  and  for  feed.  On  page  97  is 
illustrated  an  account  with  the  wheat  crop  in  1908. 


COST   OF  PRODUCTION 


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COST  ACCOUNTS 


CHAPTER  VII 

SPECIAL    COST    RECORDS 

There  are  several  convenient  special  records  which  ought  to 
be  adopted  besides  those  I  have  illustrated.  It  is  not  neces- 
sary that  expensive  printed  books  be  provided.  A  plain  sheet 
of  paper  may  be  ruled  with  little  trouble  and  pasted  in  the 
Bill  File.  In  fact,  this  is  in  many  respects  preferable  to 
printed  forms,  because  the  forms  can  then  be  changed  from 
year  to  year  to  suit  conditions.  I  illustrate  only  the  follow- 
ing:— 

Labor  Records 

The  best  form  of  a  labor  record  is  illustrated  on  pages  102 
and  104.  In  one,  account  is  kept  with  the  object  upon  which 
labor  is  expended;  in  the  other,  with  the  laborer.  For  ordi- 
nary purposes,  page  102  is  the  most  convenient,  but  where 
several  men  are  engaged  on  a  project  Form  (a),  page  104,  is 
preferable. 

Milk  Records 

Two  milk  records  are  illustrated  on  pages  102  and  104.  Each 
possesses  certain  advantages  over  the  other.  The  weekly  rec- 
ord need  not  be  so  large  and  admits  of  larger  spaces,  while  the 
monthly  record  exhibits  the  entire  month's  result  on  a  single 
page.  The  weekly  record  is  more  appropriate  for  filing,  being 
less  liable  to  soiling.  Whichever  form  is  used,  it  should  be 
tacked  to  a  board  in  a  convenient  place  for  the  milker.  A 
spring  scale,  graduated  to  hundredths,  should  be  hung  near 
the  record,  far  enough  from  the  wall  for  the  pail  to  hang 
freely.  (See  illustration,  page  95.)  The  original  records 
should  be  filed  for  at  least  a  year.  If  a  daily  time  book  is  kept, 
it  may  also  be  adapted  for  the  milk  and  poultry  records. 

Poultry  Records 

Practically  the  same  form  as  the  milk  record  can  be  used 
conveniently  for  the  egg  record,  and  it  is  not  deemed  necessary 
to  enlarge  further  on  the  subject. 

(98) 


SPECIAL   COST   RECORDS  99 

The  methods  of  improving  the  poultry  stock,  and  other  use- 
ful information  regarding  the  poultry  business,  are  found  in 
numerous  books  and  bulletins  on  the  subject.       , 

Duplicating  Sales  Book 

It  is  often  convenient  to  retain  a  duplicate  of  sales,  orders, 
receipts,  etc.  It  will  be  found  very  helpful  to  the  farmer  and 
to  the  dealer  alike,  if  the  farmer  prepares  a  bill  of  the  produce 
he  brings  into  town  for  sale.  This  will  often  avoid  misun- 
derstanding, and  may  save  money.  This  is  especially  true  if 
the  produce  is  sent  in  by  children  or  by  some  one  not  connected 
with  the  family.  On  page  104  is  illustrated  a  very  convenient 
book  which  is  kept  in  stock  in  most  stationery  stores.  Where 
this  system  is  used,  it  is  advisable  that  every  sale  be  recorded, 
and  then  listed  as  shown  on  page  103.  In  entering  in  the  Cash 
Book,  the  sale  number  should  be  inserted.  All  sales  to  mer- 
chants should  be  considered  as  cash,  even  if  the  produce  is 
exchanged  for  merchandise.  If  sales  are  made  on  time,  note 
the  fact  on  the  bill,  and  enter  it  into  the  personal  account,  as 
illustrated  on  page  22. 

The  Farm  Plot 

There  is  one  more  record  which  I  cannot  urge  too  strongly. 
I  refer  to  the  yearly  plots.  This  record  will  prove  to  be  one 
of  the  most  valuable  and  interesting  parts  of  the  farm  history. 
A  plot  is  easily  made  by  first  drawing  a  square  on  a  blank 
piece  of  paper  and  then  sketching  the  fields.  It  is,  of  course, 
unnecessary  to  draw  this  to  scale.  A  close  approximation  is 
all  that  is  necessary.     (See  the  illustration,  page  105.) 

A  Practical  Work  Report 

The  excellent  work  report  shown  on  page  101  is  used  on  the 
Beachview  Farm,  operated  by  Griffiths  &  Sons  of  Seattle.  I 
quote  from  their  letter  on  the  subject: — 

''Our  trouble  has  been  to  arrive  at  some  satisfactory  method 
of  obtaining  the  cost  of  production  of  the  various  crops  and 
kinds  of  stock.  We  are  attempting  to  solve  this  in  two 
ways : — 

"First,  as  to  labor,  by  the  weekly  work  report  which  the 


100  COST   ACCOUNTS   AND   SPECIAL   RECORDS 

foreman  is  instructed  to  fill  out,  one  for  each  man  on  the 
place,  by  quarters  of  a  day.  The  bookkeeper  can  then  appor- 
tion the  operating  expenses,  including  labor,  to  the  various 
accounts. 

^'Second,  we  have  found  it  more  difficult  to  apportion  the 
produce  raised  on  the  farm  to  the  various  stock  accounts. 
This  can  be  done  without  much  difficulty  with  the  grain,  but 
with  the  hay,  for  instance,  when  cattle  and  horses  are  fed  in 
the  same  barn,  from  the  same  loft,  but  by  different  men,  it  is 
a  difficult  matter  to  charge  the  various  stock  departments 
with  the  amount  used  to  even  an  approximation  of  correct- 
ness."    (See  page  101.) 

Office  MethodH 

Talk  about  office  methods  on  the  farm!  Why  not?  Why 
should  not  the  average  farmer  enjoy  at  least  a  comfortable 
desk  and  neatly  printed  stationery?  Every  boy  loves  "to  do 
business."  Surround  him  with  a  business  atmosphere  on 
the  homestead  and  he  will  stay  by  you  and  succeed  you  in 
your  old  age;  continue  in  your  slipshod  methods  and  he  will 
move  to  town  and  become  a  cheap  clerk  instead  of  a  landed  pro- 
prietor. Encourage  your  children  to  assist  in  your  business; 
make  them  feel  that  they  are  intimately  associated  with  you. 
Take  them  into  your  confidence  and,  as  they  grow  older,  into 
your  counsel,  especially  when  you  are  considering  your  annual 
balance  sheet,  and  a  greater  prosperity,  wider  influence,  and 
a  more  contented  family  will  be  your  reward. 


SPECIAL   COST   RECORlDS 


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Cost  accounts  and  special  records 


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SPECIAL  RECORDS 


SPECIAL   COST    RECORDS 


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COST   ACCOUNTS   AND   SPECIAL   RECORDS 


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THE   FARM   PLOT 


106  COST  ACCOUNTS   AND   SPECIAL  KECORDS 

Illustrative  Lessons 

LESSON   22 
MILK   RECORD 

I.  General  Instructions. 

The  milk  record  illustrated  on  page  102,  Form  10,  is  kept 
for  the  purpose  of  ascertaining  the  profitable  and  unprofitable 
cows.  As  explained  on  page  94,  it  need  not  be  a  continuous 
record,  but  should  be  kept  for  a  week  or  a  month  whenever 
the  information  is  desired.  It  is  very  important,  however, 
that  this  ''weeding-out"  process  be  performed  regularly  once 
a  year.  The  success  or  failure  of  the  dairy  farmer  is  likely 
to  depend,  to  a  very  large  extent,  on  this  practice.  Let  us 
take  for  illustration  a  herd  of  fifteen  cows.  Form  10  is  tacked 
to  a  board  and  hung  in  a  convenient  place  in  the  barn.  A 
spring  balance,  graduated  to  tenths  of  pounds,  is  suspended 
near  the  record,  as  illustrated  on  page  95. 

II.  Written  Work. 

Following  is  the  record  of  a  mixed  herd  for  the  week  ending 
June  5,  1909,  representing  an  actual  Oregon  herd.  The  fig- 
ures in  the  first  column  under  each  day  represent  the  morning 
milking;  those  in  the  second,  the  evening.  Record  the  follow- 
ing data  on  Form  10 : — 


Sun. 

Mon. 

Tues. 

Wed. 

Thur. 

Fri. 

Sat. 

Test. 

Kate, 

12-10 

12-11 

10-13 

11-13 

12-11 

11-12 

12-12 

4.5 

Anthia, 

13-13 

13-14 

12-13 

12-13 

14-13 

14-12 

13-11 

5.0 

Digit, 

7-  8 

8-  7 

8-  9 

8-  8 

10-  8 

10-  8 

9-  9 

7.0 

Lady, 

12-11 

10-11 

10-12 

10-11 

11-10 

12-11 

11-11 

4.8 

Beauty, 

11-11 

11-10 

11-13 

14-12 

12-11 

12-12 

13-11 

4.7 

Glenco, 

12-13 

11-12 

11-12 

10-12 

10-11 

11-11 

12-10 

4.4 

Pet, 

12-10 

11-10 

13-12 

12-11 

11-12 

13-12 

12-11 

5.1 

Bess, 

10-11 

11-11 

10-12 

11-10 

11-12 

11-10 

11-12 

4.6 

Cynthia, 

12-13 

11-12 

12-11 

12-12 

11-12 

13-12 

11-11 

4.9 

May, 

9-10 

10-10 

10-  9 

9-  9 

9-11 

11-10 

10-  9 

5.4 

Gertie, 

10-11 

10-  9 

10-12 

10-10 

9-10 

11-12 

11-10 

5.8 

Alta, 

12-12 

13-14 

13-12 

14-13 

13-13 

12-13 

13-14 

4.7 

Ruby, 

8-  9 

7-  9 

8-  9 

7-  8 

8-  8 

9-  9 

9-10 

6.2 

Pauline, 

14-15 

14-14 

14-13 

14-15 

15-15 

14-15 

15-15 

4.3 

Princess, 

16-17 

16-16 

17-18 

17-17 

16-17 

16-18 

17-17 

4.4 

SPECIAL   COST  RECORDS  107 

Find  from  the  record  :— 

1.  The  total  weight  of  milk. 

2.  The  total  weight  of  butter  fat. 

3.  The  weekly  income  from  each  cow,  assuming  that  but- 
ter fat  is  worth  31c.  per  lb.  and  skimmed  milk  25c.  per  cwt., 
allowing  10  per  cent,  for  loss  of  weight  in  skimmed  milk. 

4.  The  gain  per  cow  based  on  the  feeding  record,  Lesson 
23,  Form  9. 

5.  How  can  the  result  in  (3)  be  proved  correct? 


LESSON  23 
FEED  RECORD 
I.     General  Instructions. 

The  feeding  record,  page  102,  Form  9,  is  a  companion  to  the 
milk  record.  Lesson  22.  One  is  not  kept  without  the  other. 
Both  are  kept  for  the  purpose  of  checking  up  the  profits 
of  the  dairy  cows.  Three  methods  are  fully  discussed  on 
pages  92  and  93.  This  and  the  preceding  lessons  have  refer- 
ence to  the  third  method.  Suppose  that  Form  9  is  tacked  to 
a  board  and  hung  in  a  convenient  place  in  the  dairy  barn. 
Below  is  the  feed  record  of  the  herd  in  the  last  lesson. 

IL     Written  Work. 

Enter  the  following  results  in  the  respective  columns.  Only 
the  last  six  cows  were  fed  hay. 

Kate,  weight,  800  lbs. ;  Sunday,  grain,  4  lbs. ;  soiling,  64  lbs. ; 
Monday,  4-63 ;  Tuesday,  3^-63 ;  Wednesday,  4-65 ;  Thurs- 
day, 4^-64 ;  Friday,  3^-62 ;  Saturday,  4-64. 

Anthia,  975  lbs. ;  8-80,  8-80,  8-80,  8-80,  7-80,  7-82,  7-81. 

Digit,  1,460  lbs. ;  6-92  daily. 

Lady,  1,120  lbs. ;  8-90  daily. 

Beauty,  830  lbs. ;  4-68  daily. 

Glenco,  1,440  lbs.;  6-100,  6-110,  6-110,  6-100,  6-100,  6-100, 
6-110. 

Pet,  950  lbs.;  7-80  Sunday,  Monday,  Tuesday;  7-83  Wednes- 
day, Thursday,  Friday,  Saturday. 

Bess,  1,000  lbs. ;  6-86  daily. 


108  COST  ACCOUNTS  AND   SPECIAL  RECORDS 

Cynthia,  1,270  lbs. ;  8-100  daily. 

May,  850  lbs.;  5-65  Sunday,  Monday,  Tuesday,  Wednesday; 

4-60  Thursday,  Friday,  Saturday. 
Gertie,  900  lbs. ;  6-70  daily. 
Alta,  1,375  lbs.;  8-100  daily. 
Ruby,  1,050  lbs.;  24  lbs.  hay,  4|  grain,  42  soiling;  25-4-43, 

23-5-45,  24-4i-44,  25-4-43,  25-4^-45,  23-5-43. 
Pauline,  1,300  lbs. ;  27-6-45  daily. 
Princess,  1,350  lbs.;  30-7-48  daily. 

Find  from  the  record : — 

1.  The  total  feed  per  cow  and  enter  the  result  in  the 
proper  column. 

2.  The  weekly  cost  per  cow  when  the  grain  mixture  is 
worth  95c.  per  cwt.,  soiling  $1.05  per  ton,  and  hay  $10.50 
per  ton. 

3.  What  changes  should  be  made  in  the  herd? 


LESSON   24 

LABOR  RECORD 

I.  General  Instructions. 

As  explained  on  page  98,  a  labor  record  may  be  prepared 
monthly  or  weekly.  The  monthly  form,  illustrated  on  page 
102,  has  many  advantages.  In  the  first  column  may  be  listed 
either  the  various  accounts  to  which  the  labor  is  to  be  charged, 
as  in  this  exercise,  or  a  sheet  may  be  devoted  to  each  account 
and  the  names  of  the  laborers  listed  in  the  first  column.  The 
latter  plan  is  preferable  in  large  enterprises.  Sundays  fall  on 
May  6,  13,  20,  and  27.  Mark  "S."  above  those  dates  and 
avoid  placing  any  figures  in  the  Sunday  columns. 

II.  Written  Work. 

1.  On  Form  6  prepare  the  following  pay  roll  for  the  month 
of  May,  1910,  as  illustrated  on  page  102 : — 

Labor  on  Corn,  Man  and  Team,  May  7,  8,  9,  and  10,  9  hrs. 
each  @  30c.  per  hour. 


SPECIAL  COST   RECORDS  109 

Live  stock,  Man  and  Team,  18,  4  hrs. ;  28,  8  hrs.  @  30c.  per 

hour. 
Orchard,  3,  3  hrs. ;  14,  2  hrs. ;  23,  1  hr.  @  15c.  per  hour. 
Improvements,  7,  4  hrs. ;  12,  4  hrs. ;  19,  3  hrs. ;  25,  2  hrs.  @ 

15c.  per  hour. 
Machinery  and  Implements,  1,  1  hr. ;  5,  2  hrs.;  15,  1  hr. ;  22, 

3  hrs.  @  15c.  per  hour. 
Wheat,  4  and  5,  9  hrs.  each;  16  and  17,  9  hrs.  each,  Man  and 

Team,  @  30c.  per  hour. 
Onions,  1  and  2,  9  hrs.  each;  11,  6  hrs.  @  15c.  per  hour. 
Potatoes,  21,  9  hrs. ;  24,  6  hrs. ;  25,  5  hrs.,  Man  and  Team,  @ 

30c.  per  hour. 
Hay,  11,  3  hrs.;  14,  6  hrs.;  15,  4  hrs.;  18,  3  hrs.,  Man  and 

Team,  @  30c.  per  hour. 
Oats,  26,  29,  and  30,  9  hrs.  each ;  31,  7  hrs.,  Man  and  Team,  @ 

30c.  per  hour. 

2.  Add  the  number  of  hours  under  each  account  and  enter 
in  the  hour  columns. 

3.  Find  the  amount  under  each  account,  and,  finally,  the 
total  labor. 


LESSON  25 
THE  FARM  PLOT 

Read  the  suggestions  regarding  the  farm  plot  on  page  99. 
On  Form  11  draw  to  scale  any  farm  with  which  you  are 
acquainted,  preferably  your  own  farm,  if  you  own  one.  Lay 
out  the  various  fields  and  mark  the  crop  and  the  acreage,  as 
shown  on  page  105.     Draw  it  first  in  lead  pencil,  then  in  ink. 

Supplementary  Kxercises  (Optional) 

1.     THE  INVESTMENT 

The  census  for  1900  gives  the  following  apportionment  for 
land  and  improvements,  buildings,  implements,  machinery, 
and  live  stock  for  every  $10,000.00  invested : — 


m 


110  COST  ACCOUNTS  AND   SPECIAL  RECORDS 


Division. 

Total. 

Land 
and  Impr. 

Buildings. 

Imp. 
and  Mach. 

Live  Stk. 

N. 

Atlantic  States. 

.$10,000 

$5,737 

$2,567 

$606 

$1,090 

S. 

Atlantic  States. 

.    10,000 

6,661 

2,720 

332 

1,362 

N. 

Central  States .  . 

.    10,000 

6,055 

825 

500 

2,620 

S. 

Central  States.  . 

.    10,000 

4,114 

1,114 

373 

4,356 

W( 

estern  States  .  .  . 
Total 

.    10,000 

4,463 

693 

593 

4,251 

.$50,000  $27,030 

$7,919 

$2,404  $13,679 

Average    $10,000     $5,406     $1,584       $481     $2,736 

Compare  the  above  with  two  or  more  typical  farms  with 
which  you  are  acquainted. 


2.     PRIVATE  ACCOUNTS 

The  student  will  find  it  a  valuable  exercise  to  keep  account 
of  his  personal  receipts  and  expenditures  on  a  form  similar  to 
No.  2.  The  columns  may  be  headed  as  follows:  Receipts — 
Earnings,  From  Home;  Payments — Fees  (Books  and  Sta- 
tionery), Board,  Room,  Clothing,  Recreation.  A  semester's 
record  of  the  student's  actual  expenses  will  be  given  special 
credit.  Whether  submitted  for  credit  or  not,  all  students  are 
urged  to  keep  an  accurate  record  of  their  personal  expenses. 

3.     AGRICULTURAL  STATISTICS 

It  is  desired  to  obtain  accurate  data  on  farm  management, 
and  you  are  required  to  write  to  two  or  more  farmer  friends 
for  certain  information.  Copies  of  a  letter  will  be  furnished 
by  your  teacher.  (A  copy  of  the  proposed  letter  will  be  fur- 
nished any  teacher  by  the  author.)  Tabulate  the  result  and 
prepare  a  report  to  be  discussed  by  the  class. 

4.     COST  RECORDS  OF  CROPS 

As  illustrated  on  page  97,  prepare  a  cost  record,  showing  the 
net  profit  or  loss  of  two  crops,  from  information  secured  from 
reliable  sources.  Any  local  crop  may  be  taken,  such  as  pota- 
toes, wheat,  oats,  hay,  etc.  Two  months  will  be  allowed  for 
the  work. 


SPECIAL   COST   RECORDS  111 

Hand  in  your  work  with  a  letter  of  explanation  of  the 
system. 

5.     COST  RECORDS  OF  STOCK 

According  to  either  the  second  or  third  method  outlined  on 
page  92,  prepare  a  statement  of  the  net  profit  or  loss  of  not 
less  than  five  milch  cows.  Your  information  may  be  drawn 
from  any  farm,  from  the  college  department  of  dairying,  or 
from  agricultural  bulletins.  The  records  required  are :  Labor, 
milk,  feed  record,  and  the  individual  Ledger  account  of  each 
animal.  Two  months  will  be  allowed  for  this  work.  Use 
Forms  1,  6,  9,  and  10. 

Hand  in  your  work  with  a  letter  of  explanation  of  the 
system. 


PART  III 

BUSINESS  ORGANIZATIONS, 
CORRESPONDENCE,   AND    FORMS 


BUSINESS  ORGANIZATIONS, 
CORRESPONDENCE,  AND   FORMS 


CHAPTER  VIII 

BUSINESS    ORGANIZATIONS 

The  tendency  of  to-day  in  all  important  business  enterprises 
is  toward  organization  and  cooperation.  What  would  be  im- 
possible for  an  individual  to  accomplish  becomes  a  compara- 
tively easy  task  when  the  resources  of  a  number  of  persons 
are  combined.  While  no  business  organization  should  be 
effected  without  the  assistance  of  competent  legal  counsel,  it 
is  important  that  the  parties  should  understand  the  nature  of 
the  organization  and  the  necessary  steps  required  for  their 
promotion  and  the  form  of  contracts  in  common  use.  This  is 
all  that  will  be  attempted  in  this  chapter.  The  legal  aspects 
of  each  organization  must  be  studied  under  commercial  law. 
The  most  important  among  business  organizations  are  Part- 
nerships, Joint  Stock  Companies,  and  Corporations. 

Partnership 

Two  or  more  individuals  competent  to  make  contracts  under 
the  law  may  combine  their  labor  and  capital  in  any  lawful 
business  enterprise.  When  this  is  done  without  any  legal 
formality  it  is  called  a  partnership.  The  agreement  is  called 
the  Articles  of  Copartnership  and  should  always  be  in  writing 
and  prepared  by  a  competent  attorney.  Any  name  may  be 
adopted  which  cannot  be  shown  to  cause  an  injury  to  another's 
business.  Each  partner  is  personally  liable  for  all  the  debts  of 
the  partnership  unless  it  is  clearly  held  out  before  the  public 
that  another  agreement  exists  between  the  partners.  This 
liability  extends  to  the  personal  property  of  each  partner  as 
well  as  to  the  partnership  assets, — one  of  the  subjects  most 
often  misunderstood  by  the  layman.     Nor  does  the  liability 

(115) 


116  BUSINESS  uiiGANIZATlONS,  CORRESPONDENCE,  FORMS 

depend  on  the  amount  invested  or  the  service  rendered  by  each 
partner.  So  long  as  the  business  is  solvent,  the  profits  or 
losses  are  divided  according  to  the  articles  of  copartnership, 
but  if  the  business  fails  and  only  one  partner  is  able  to  pay, 
he  is  responsible  for  all  the  debts  of  the  firm. 

Following  is  a  standard  form  of  articles  of  copartnership : — 

Articles  of  Copartnership 

This  Agreement  Witnesseth,  That  John  Doe  of  Auburn, 
Illinois,  and  Edward  Harvey  of  Auburn,  Illinois,  have  this 
day  agreed  to  associate  themselves  together  as  a  copartnership, 
for  the  purpose  of  engaging  in  the  business  of  buying  and 
selling  for  profit  Feed  and  Produce,  at  Auburn,  Sangamon 
County,  Illinois,  under  the  firm  name  of  Doe  and  Harvey,  the 
term  of  said  copartnership  to  continue  five  years  from  and 
after  the  first  day  of  June,  1910,  unless  sooner  dissolved. 

The  investment  contributed  by  the  aforesaid  partners  is  to 
be  as  herein  set  forth,  to  wit :  John  Doe  contributes  $3,000.00 
in  cash,  and  Edward  Harvey  contributes  $3,000.00  in  cash. 

The  profits  or  losses  of  said  partnership  business  are  to  be 
shared  equally. 

With  respect  to  the  time  and  services  given,  and  the  com- 
pensation to  be  received,  it  is  agreed  that  both  parties  shall 
give  their  entire  time  to  the  business.  John  Doe  shall  be 
allowed  a  salary  of  One  Hundred  Dollars  ($100.00)  per 
month,  and  Edward  Harvey  Eighty  Dollars  ($80.00)  per 
month,  unless  otherwise  agreed  between  the  parties. 

It  is  also  agreed  that  aside  from  the  profits  and  compensa- 
tions heretofore  mentioned,  neither  partner  is  to  withdraw 
from  the  business  any  money  or  other  property,  except  with 
the  written  consent  of  the  partners. 

It  is  especially  agreed  that  neither  of  the  parties  to  this 
contract  shall  sign  or  indorse  any  bank  note,  draft,  or  com- 
mercial paper,  nor  sign  any  official  or  other  bond,  nor  do 
any  other  act  to  create  a  financial  liability  or  obligation,  with- 
out the  written  consent  of  his  copartner. 

At  the  expiration  or  sooner  determination  of  said  copartner- 
ship, the  business  and  property  of  said  firm  may  be  closed  out 
by  sale;  and,  after  all  debts  and  liabilities  are  paid  and  dis- 


BUSINESS   ORGANIZATIONS  117 

charged,  the  amount  remaining  shall  be  divided  between  the 
partners  in  the  ratio  of  their  respective  interests;  or,  if  the 
parties  so  agree,  the  copartnership  may  be  continued  for  such 
further  time,  and  upon  such  terms,  as  the  members  thereof 
may  be  able  to  agree  upon. 

Witness  our  hands  this  first  day  of  June,  1910. 

Witness-  1^-   ^-  BROWN,  JOHN  DOE, 

wiiness.  |g   ^   Johnson,  Edward  R 


Edward  Harvey. 


EXERCISE  1 


Write  articles  of  copartnership  for  any  firm  with  which  you 
may  be  acquainted,  using  the  articles  on  page  116  as  a  model. 

Joiut  Stock   Gompauies 

A  joint  stock  company  differs  from  a  partnership  in  its 
organization  and  membership  only,  not  in  the  liability  of  the 
members.  Its  organization  is  like  the  corporation;  the  lia- 
bility of  its  members  and  its  formation  are  like  the  partner- 
ship. No  legal  steps  are  necessary  to  form  a  stock  company. 
The  capital  is  usually  divided  into  shares  like  the  corporation, 
and,  in  voting,  a  member  of  a  stock  company  has  but  one  vote 
regardless  of  his  interest  in  the  business,  while  in  the  corpora- 
tion the  voting  power  depends  on  the  amount  of  stock  held. 
The  stock  company  has  power  of  succession,  but  has  no  seal. 
A  suit  must  be  conducted  in  the  name  of  all  the  stockholders 
and  not  in  the  name  of  the  company  through  its  officers. 
The  advantages  of  a  stock  company  over  a  .corporation  are : 
(1)  less  formality  in  organization ;  (2)  less  publicity;  (3)  not 
affected  by  the  corporation  tax;  (4)  no  public  reports  re- 
quired. 

EXERCISE  2 

Write  a  paragraph  pointing  out  how  the  Mood  River  Apple 
Growers'  Union  could  be  changed  into  a  joint  stock  company. 
(See  Articles  on  page  119.) 

Corporations 

Because  of  its  adaptability  to  a  large  variety  of  conditions, 
the  corporation  has  become  the  favorite  form  of  business 
organizations.     Many  corporations  have   stockholders  in  all 


118  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

parts  of  the  world,  but  the  organization  is  represented  in  its 
sphere  of  business  and  before  the  law  by  its  officers  and 
directors.  Thus  a  corporation  may  be  defined  as  an  artificial 
person,  created  by  law,  either  under  special  enactment  or 
under  general  statute,  to  act  as  one  person,  through  its  officers, 
in  its  business  capacity  and  before  the  law. 

The  formation  of  a  corporation  should  be  thoroughly  under- 
stood by  every  citizen,  but  it  is  extremely  inadvisable  to  or- 
ganize without  the  assistance  of  a  competent  attorney.  It  is 
not  safe  to  lay  down  many  general  rules  governing  the  organi- 
zation of  corporations,  since  the  laws  differ  materially  in  the 
several  states.  Reliable  information  can  be  obtained  free  of 
cost  from  the  Secretary  of  State  in  each  state  of  the  Union. 

The  corporation  differs  from  the  partnership  in  several 
important  respects.  (1)  It  is  created  by  law;  that  is,  no 
corporation  is  recognized  before  the  law  unless  it  is  organized 
exactly  as  set  forth  in  the  statutes  of  the  various  states.  (2) 
The  liability  of  the  stockholder  extends  only  to  the  amount  of 
his  stock,  unless  otherwise  provided  in  the  articles  of  associa- 
tion. (3)  A  corporation  can  sue  and  be  sued  in  its  own  name 
through  properly  qualified  officers.  (4)  It  has  the  power  of 
succession;  that  is,  the  organization  is  not  affected  by  the 
death  or  disability  of  any  stockholder.  (5)  The  interest  of  a 
stockholder  may  be  transferred  without  affecting  the  organi- 
zation. (6)  The  voting  power  of  each  stockholder  is  propor- 
tional to  the  amount  of  his  stock. 

From  a  careful  study  of  the  constitution  and  by-laws  given 
below,  it  will  be  seen  that  the  articles  of  association  must  set 
forth  (1)  the  intention  of  forming  a  corporation;  (2)  the 
corporate  name;  (3)  the  purpose  of  the  organization;  (4) 
the  place  of  business;  (5)  election  of  officers;  (6)  powers 
and  duties  of  officers;   (7)  amount  and  division  of  stock,  etc. 

The  advantages  of  the  corporate  organization  are  many  and 
important.  By  it  the  cooperative  spirit  is  fostered;  in  union 
is  strength.  The  small  means  of  a  large  number  are  collected 
and  effective  capital  is  secured  for  large  enterprises ;  members 
may  enter  or  withdraw  without  disturbing  the  organization; 
through  organization,  special  talents  are  utilized  to  best  ad- 
vantage; waste  of  material,  labor,  and  capital  are  reduced  to 


BUSINESS  ORGANIZATIONS  119 

a  minimum;  the  publicity  required  by  law  has  a  wholesome 
influence  against  corruption  and  dishonesty. 

It  is  not  out  of  place  to  give  a  word  of  caution  to  the  unin- 
itiated in  the  subject.  Schemers  often  promote  corporations 
for  fraudulent  purposes  and  hide  their  own  designs  behind 
innocent  stockholders.  Do  not  rush  into  incorporating;  a 
majority  of  the  corporations  formed  are  failures.  If  you 
wish  control  of  the  corporation,  you  should  control  at  least 
fifty-one  per  cent,  of  the  capital  stock. 

Every  stockholder  should  be  provided  with  a  copy  of  the 
constitution  and  by-laws  and  also  with  the  annual  report. 
See  to  it  that  the  minutes  of  the  board  of  directors  and  all 
books  of  account  are  carefully  kept.  Every  stockholder  has 
the  right  to  inquire  into  the  business  methods  of  the  corpora- 
tion. 

The  legal  aspects  of  stock  issue,  kind  of  stock,  dividends, 
surplus,  etc.,  are  subjects  for  commercial  law. 

The  constitution  and  by-laws  of  the  Hood  River  Fruit 
Growers'  Union  is  given  below  as  a  model : — 

Constitution  and  By-Laws  of  the  Hood  River  Apple  Growers*  Union 
« 

Article  I 

The  name,  place  of  business,  capital  stock,  and  purposes  of 
this  corporation  are  set  forth  in  the  articles  of  incorporation, 
which  are  referred  to  as  part  of  these  by-laws. 

Article  II 
The  membership  of  this  corporation  shall  be  confined  to 
actual  growers  of  fruit  of  Hood  River  Valley  and  vicinity. 

Article  III 

The  board  of  directors  shall  consist  of  nine  members,  four 
of  whom  shall  hold  office  for  more  than  one  year.  They  shall 
be  elected  annually  and  shall  serve  until  their  successors  are 
elected  and  qualified.  They  shall  qualify  as  directors  within 
ten  days  after  their  election,  and  within  ten  days  thereafter 
they  shall  elect  from  their  number  a  president,  vice-president, 
and  secretary.  They  shall  also  choose  a  treasurer,  who  shall 
be  required  to  give  bonds,  with  surety  in  such  sums  as  they 


120  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

may  deem  ample.  They  may  choose  a  bank  as  treasurer  with- 
out bonds.  The  annual  meeting  shall  be  held  on  the  first 
Saturday  in  April  in  each  year. 

Article  IV 

The  directors  shall  have  the  power  to  levy  and  collect 
assessments  on  the  capital  stock  not  to  exceed  fifty  per  centum 
of  the  stock  subscribed  at  any  one  time  and  not  oftener  than 
every  sixty  days,  the  same  to  become  delinquent  in  thirty  days 
from  date  of  notice  of  such  assessment  in  the  local  newspaper. 
The  directors  shall  sell  shares  of  stock  to  actual  fruit  growers 
only. 

Article  V 

The  directors  shall  employ  such  agents  or  other  employees 
as  are  necessary  to  do  the  business  of  the  corporation,  and 
shall  fix  their  remuneration;  provided,  that  the  board  of 
directors  shall  receive  no  salary  for  acting  as  directors.  They 
shall  have  daily  account  sales  rendered  to  the  members  of  the 
union  each  day,  as  received  by  them  or  their  agent,  giving 
a  statement  by  whom  sold,  gross  sales,  commission,  freight,  or 
express,  and  amount  due  members  of  the  union;  also  giving 
condition  of  fruit,  if  there  be  any  complaint. 

Article  VI 

The  directors  may  refuse  to  receive  for  shipment,  under  the 
brand  of  the  union,  any  package  of  fruit  not  considered  prime 
from  any  cause.  They  shall  refuse  to  receive  for  shipment 
fruit  from  any  person  not  holding  stock. 

Article  VII 
This  organization  through  its  board  of  directors  shall  have 
the  exclusive  and  unqualified  power  to  market  all  apples  grown 
by  any  of  its  members.     A  contract  between  each  member  and 
the  board  will  be  required. 

Article  VIII 

The  duties  of  the  secretary  shall  be  to  keep  a  record  of  the 
proceedings  of  the  meetings  of  the  stockholders  and  directors. 
He  shall  keep  the  corporate  seal  of  the  association  and  shall 


BUSINESS   ORGANIZATIONS  121 

be  custodian  of  all  deeds,  articles  of  agreement,  and  other 
valuable  instruments  of  writing  belonging  to  the  association. 
He  shall  keep  all  books  of  the  issuance  and  transfer  of  stock 
and  shall  countersign  all  certificates  of  stock  and  affix  the 
seal  of  the  board  of  directors  and  stockholders,  and  shall  keep, 
or  cause  to  be  kept,  all  books  of  account  necessary  to  the 
transaction  of  the  general  business  of  the  association.  The 
manager  of  the  union  shall  be  placed  on  a  flat  salary. 

Article  IX 
The  board  of  directors  shall  provide  the  necessary  means 
for  carrying  out  the  purposes  for  which  the  association  is 
formed  by  reasonable  charges  and  commissions  for  the  service 
rendered  by  the  association  to  its  members  and  customers. 

Article  X 
The  duties  of  the  treasurer  shall  be  to  receive  all  moneys  due 
or  paid  to  the  association  and  deposit  the  same  as  the  direc- 
tors may  instruct;  to  pay  out  said  funds  upon  the  written 
order  or  check  of  the  president,  first  vice-president,  or  general 
manager,  when  countersigned  by  the  secretary. 

Article  XI 
All  notes  or  other  evidence  of  indebtedness  of  the  associa- 
tion shall  be  signed  by  the  president  and  countersigned  by  the 
secretary  of  the  board  of  directors. 

Article  XII 

The  president  shall  instruct  the  secretary  to  call  a  meeting 

of  the  stockholders  whenever  in  his  judgment  the  necessities 

of  the  union  require  it,  by  giving  one  week's  notice  through 

the  local  newspaper  and  send  each  a  notice  on  a  postal  card. 

Article   XIII 
No  union  label  shall  be  placed  on  a  box  of  fruit  except  by 
the  manager  of  the  warehouse  just  before  shipping. 

Article  XIV 
Each  packer  will  be  held  responsible  for  his  own  work  by  a 


122   BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

system  of  fines.     No  fruit  will  be  received  unless  put  up  by  a 
packer  employed  by  the  union. 

Article  XV 

The  union  will  have  no  packing  house  foremen  except  those 
employed  by  the  union. 

Article  XVI 
A  majority  of  the  stock  subscribed,  upon  which  all  legal 
calls  or  assessments  have  been  paid  in  full,  shall  constitute 
a  quorum  at  any  stockholders'  meeting,  and  no  vote  shall  be 
counted  which  is  not  represented  by  one  share  of  the  stock 
upon  which  all  calls  or  assessments  have  been  paid. 

Article  XVII 

These  by-laws  may  be  amended  by  vote  of  the  majority  of 
the  stock  upon  which  all  calls  or  assessments  have  been  paid, 
at  any  regular  or  called  meeting,  provided  that  notice  to 
amend  the  by-laws  shall  have  been  given  in  the  call  for  a 
special  meeting. 

Article  XVIII 

Any  member  desiring  to  dissolve  his  connection  with  this 
corporation  may  do  so  by  surrendering  his  stock  to  the  secre- 
tary thereof  or  by  transferring  it  to  any  member  in  good 
standing  on  the  secretary's  books. 


EXERCISE  3 
Write  a  letter  to  your  instructor  describing  in  detail  how 
you  would  organize  and  incorporate  a  creamery.  Point  out 
the  peculiarities  of  the  incorporation  laws  of  your  state.  (You 
can  secure  a  copy  of  these  laws  free  from  the  Secretary  of 
State.)' 


CHAPTER  IX 

THE    BUSINESS    LETTER 

In  this  age  of  complex  business  activity,  where  a  large 
volume  of  the  business  of  the  country  is  done  by  letter,  it  is 
essential  that  the  farmer,  as  well  as  the  merchant,  be  able  to 
write  a  correctly-arranged,  direct-to-the-point  business  letter. 
Therefore,  the  purpose  of  this  chapter  is  to  set  forth  in  as 
clear  and  concise  a  manner  as  possible  the  customary  forms 
and  arrangement  of  business  letters. 

Business  letters  include  all  correspondence  relating  to  the 
writer's  financial,  professional,  or  official  dealings  with  other 
people,  and  should  clearly  set  forth  the  subject  matter  of 
which  they  treat. 

In  order  for  a  mechanic  to  do  good  work  he  must  have 
suitable  material  and  good  tools  with  which  to  work.  In 
order  for  the  writer  of  letters  to  do  good  work  and  create  a 
good  impression  he  should  use  a  good  grade  of  paper  and  pens, 
and  ink  that  flows  freely. 

We  judge  people  largely  by  their  surroundings  and  the 
associates  they  choose.  The  writer  of  a  letter  is  judged  largely 
by  the  general  arrangement,  wording,  and  neatness  of  his 
letter,  and  by  the  quality  of  stationery  used. 

The  preceding  paragraph  brings  us  to  another  important 
matter  emphasized  elsewhere  in  this  text.  Every  farm,  no 
matter  how  small,  should  have  a  suitable  name.  In  fact,  the 
importance  of  selecting  a  name  for  your  farm  cannot  be 
overestimated.  It  not  only  lends  value  to  your  farm  and 
dignity  to  your  community,  but  it  is  a  source  of  satisfaction 
to  have  neatly-printed  stationery  bearing  the  name  of  your 
farm,  the  name  of  the  proprietor,  and  in  some  instances  a 
sketch  or  small  photograph  indicating  the  products  of  the 
farm.  (See  models  on  page  124.)  It  is  well,  however,  to  bear 
in  mind  that  crowding  too  much  on  a  letter  head  detracts 
from  rather  than  adds  to  its  value.  Your  post  office  address, 
including  your  box  or  R.  F.  D.  number,  should  also  appear  on 

(123) 


124  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 


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MODEL   LETTER    HEADS 


THE   BUSINESS   LETTER  125 

the  letter  head,  correctly  arranged,  so  that  in  writing  the 
heading  of  the  letter  all  that  is  necessary  to  do  is  to  fill  in 
the  date. 

Skeleton  Letter 

Before  taking  up  the  discussion  of  the  various  parts  of  a 
letter,  a  skeleton  letter  is  presented  herewith,  with  the  differ- 
ent parts  lettered  for  the  purpose  of  reference.  Study  the 
skeleton  form  very  closely,  not  only  with  a  view  to  noting 
how  and  where  the  heading  is  arranged,  the  uniformity  of  the 
indentations,  and  the  complimentary  close  and  signature,  but 
also  notice  how  balanced  the  letter  appears  in  the  page. 

(a) , 

ib) 

(c) , 

(d) 

(e) :— 

(/) 


(/) 


(/) 

ig) 


(h) 

Key  to  skeleton  letter : —  ' 

(a)     First  line  of  the  heading. 

(&)     Second  line  of  the  heading. 

(c)  Name  and  title  of  the  person  to  whom  you  are  writ- 
ing. 

(d)  Address  of  the  person  to  whom  you  are  writing.  (In 
some  cases  the  address  should  occupy  two  lines.  See  model, 
page  126.) 


120  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 


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THE  FORM 


THE   BUSINESS   LETTER  127 

(e)  Salutation,  as  Dear  Sir,  Gentlemen,  My  dear  Mr. 
Smith,  etc. 

(f)  The  beginning  of  the  body  of  the  letter.  Strictly 
speaking,  the  salutation  is  a  part  of  the  first  paragraph ;  how- 
ever, for  the  sake  of  uniformity,  it  is  well  to  begin  the  first 
paragraph  of  the  body  of  the  letter  as  far  to  the  right  of  the 
left-hand  margin  as  succeeding  paragraphs.  Note  that  all 
paragraphs  are  uniformly  indented. 

(g)  Complimentary  close,  as  Yours  truly,  etc. 

(h)  The  writer's  signature.  Note  that  the  signature  be- 
gins as  far  to  the  right  of  the  complimentary  close  as  the 
second  line  of  the  heading  (h)  begins  to  the  right  of  the  first 
line  (a). 

The  Heading 

The  heading  of  a  letter  includes  the  address  of  the  writer 
and  the  date.  It  may  occupy  one,  two,  or  three  lines,  depend- 
ing on  the  length  of  the  address. 

The  following  forms  illustrate  one,  two,  and  three  line 
headings : — 

Form  1 

(a,  h)  Corvallis,  Oregon,  July  15,  1910. 
(c) , 

(d) 

ie) :— 

(/) 

Form  1  shows  a  one-line  heading  begun  far  enough  from  the 
left-hand  margin  to  fill  the  remaining  space  tp  the  right. 
Should  it  be  necessary  to  begin  a  heading  to  the  left  of  the 
center  of  the  body  of  the  letter,  in  order  to  get  it  on  one  line, 
a  two-line  heading  should  be  used.  It  is  not  good  form  for 
the  heading  to  extend  to  the  left  of  the  middle  of  the  sheet. 

Observe  carefully  the  punctuation  of  the  heading. 

Form  2 
(a)  68  Sixth  Street, 

{h)  Portland,  Ore.,  July  5,  1910. 

(c) , 

w 

(e) :— 

(f) 


128  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

Form  2  shows  a  two-line  heading,  the  first  line  begun  at  or 
a  little  to  the  right  of  the  middle  of  the  page,  and  the  second 
line  begun  as  far  to  the  right  of  the  first  as  the  second  line  of 
the  introductory  address  (d)  is  begun  to  the  right  of  the  first 
line  of  the  introductory  address  (c). 

Form  3 
(a)  Chehalis,  Lewis  County,  Wash., 
{h)   July  15,  1910. 

(c) , 

(d) 

(e) :— 

(f) 

Form  3  shows  a  two-line  heading  with  the  post  office  address 
occupying  one  line  and  the  date  the  other. 

Form  Jf. 

(a)  Corvallis,  Ore.,  July  12,  1910. 
{b)   R.  F.  D.  No.  2. 

(c) , 

(d) 

ie) :~ 

(/) 

Form  4  shows  a  two-line  heading  where  it  is  desired  to  give 
the  rural  route. 

Form  4  might  also  be  arranged  as  follows : — 

R.  F.  D.  No.  3, 

Corvallis,  Oregon, 

July  25,  1912. 

The  models  on  page  126  illustrate  incorrect  and  correct 
forms  of  a  business  letter.  Note  the  arrangement  of  the  head- 
ing, lines  one  and  two.  The  R.  F.  D.  or  box  number  or  street 
number  should  always  be  written  in  connection  with  the  head- 
ing. Also  note  that  line  three  has  been  skipped.  This  is  done 
for  the  purpose  of  lending  balance  to  the  letter  head. 

Punctuation 

The  heading  of  a  letter  may  be  separated  into  distinct  parts 
for  the  purpose  of  punctuation.     A  comma  should  follow  each 


THE   BUSINESS   LETTER  129 

part  of  the  address  except  the  last,  which  should  be  followed 
by  a  period,  as  shown  in  the  models. 

EXERCISE  4 

Write,  punctuate,  capitalize,  and  correctly  arrange  the  fol- 
lowing headings: — 

1.  Albany  Oregon  March  29  1888 

2.  Vancouver  Washington  may  3  1912 

3.  bloomington  Indiana  821  Fifth  street  October  1  1910 

4.  321  seventh  Street  peoria  Illinois  May  4,  1911. 

5.  1907  Oregon  agricultural  College  Sept  25  corvallis 
Oregon 

6.  Write  headings  for  four  or  more  places  with  which  you 
are  familiar. 

Introductory  Address  and  Salutation 

The  introductory  address  of  a  letter  is  made  up  of  two 
parts,  (c)  consisting  of  the  full  name  and  title  of  the  person 
addressed,  (d)  consisting  of  his  street  number,  P.  0.  box,  and 
post  office  address,  or  such  other  information  as  the  person 
to  whom  you  are  writing  may  designate. 

The  salutation  is  the  term  Dear  Sir,  Dear  Madam,  Gentle- 
men, etc.,  and  should  begin  on  a  line  with  the  body  of  the 
letter,  that  is,  flush  with  the  left-hand  margin. 

Custom  as  well  as  courtesy  requires  that  some  title  be  used 
with  the  name.  Individual  titles  generally  used  are  Miss, 
Mrs.,  Mr.,  Dr.,  Rev.,  Esq.,  Prof.,  and  Hon.,  depending  on  the 
rank  or  profession  of  the  person  addressed.  When  a  part- 
nership or  corporation  requires  a  title,  Messrs.  may  be  used. 
A  title  should  not  be  used  if  the  name  of  the  firm  begins  with 
"the."  Only  one  title  should  be  used,  and  it  should  be  placed 
before  or  after  the  name,  as  Mr.  John  H.  Brown,  or  John  H. 
Brown,  Esq.,  not  Mr.  John  H.  Brown,  Esq. 

Models 

The  following  are  good  models  showing  the  heading,  intro- 
ductory address,  salutation,  and  complimentary  close,  the  body 
of  the  letter  being  omitted.  The  line  after  the  complimentary 
close  indicates  the  position  of  the  signature. 


1^0  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

Form  1 

Aurora,  111.,  March  10,  1912. 
Montgomery,  Ward  &  Co., 

Chicago,  Illinois. 
Gentlemen : — 

Yours  truly, 


Form  2. 

67  Wabash  Avenue, 

Chicago,  June  24,  1910. 
Mr.  A.  P.  Robinson, 

211  Globe  Block, 

Seattle,  Washington. 
Dear  Mr.  Robinson: — 

Sincerely  yours, 


Form  3 

Michigan  University, 

Ann  Arbor,  Michigan, 

June  14,  1911. 
Dear  Frank: — 

Sincerely, 


To  Mr.  Frank  Huntington, 

Beloit,  Wisconsin. 

Form  U 

The  Ideal  Farm, 

McMinnville,  Oregon, 

October  12,  1914. 
Mr.  Silas  Blank, 

212  Second  Ave., 

Portland,  Oregon. 
Dear  Sir: — 

Yours  truly, 


Punctuation 

Carefully  observe  the  arrangement  and  punctuation  of  the 
models.     Notice  that  each  part  of  the  introductory  address  is 


THE   BUSINESS    LETTER  131 

followed  by  a  comma,  except  the  last,  which  is  followed  by  a 
period.  The  salutation  should  be  followed  by  a  colon  and  the 
complimentary  close  by  a  comma.  The  writer's  signature 
should  be  followed  by  a  period. 

Capitalization 

Every  sentence  should  begin  with  a  capital  letter,  and  every 

important  word  of  the  address   should  be  capitalized;  also 

observe  that  all  titles  are  capitalized  and  that  the  first  and 

last  word  and  every  noun  in  the  salutation  should  begin  with 

a  capital. 

EXERCISE  5 

Write  the  following  headings  and  introductory  addresses, 
arranging  and  punctuating  them  according  to  the  models 
given : — 

1.  Wise  Virginia  June  15,  1910  Mr.  F.  B,  Goshen  Clint- 
wood  Virginia  Dear  Sir 

2.  Berkeley  Calif  April  11  1910  Mrs.  James  P.  Hadley 
Eugene  Oregon  Dear  Madam 

3.  Raymond  Washington  821  Fourteenth  street  July  18 
1909  Mr.  T  B  Stidham  321  Railroad  Ave  Doty  Wash 

4.  821  Second  Avenue  Seattle  Washing  May  4  1910  John 
P  Randolph  Esq  741  I  street  Tacoma  Washington 

5.  Ames  Iowa,  Dec  23  1908  The  Pure  Food  Grocery  Co 
City  gentlemen 

6.  Kalispell  Mont  Nov  8  1911  The  Home  Lumber  Co  Fargo 
N  Dak  gentlemen 

The  Body  of  the  Letter 

The  mechanical  arrangement  of  the  heading,  introductory 
address,  salutation,  body  of  the  letter,  and  complimentary 
close  can  be  mastered  in  a  short  time  by  any  one  who  is  care- 
ful and  painstaking.  However,  the  composing  of  the  letter 
proper  is  an  entirely  different  matter,  and  by  far  the  most 
difficult  part  of  letter  writing,  and  a  good  style  can  be  acquired 
only  by  careful  and  painstaking  effort. 

It  is  not  the  purpose  of  this  chapter  to  give  you  certain 
forms  of  letters,  worded  in  a  specific  way,  for  the  various 
subjects  about  which  it  may  be  necessary  for  you  to  write. 
But  it  is  rather  its  purpose  to  give  you  suggestions  which  will 


132   BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

be  of  assistance  to  you  in  the  writing  of  your  business  letters, 
and  that  will  enable  you  to  put  into  your  letters  your  own 
originality  in  a  clear,  forceful,  convincing  manner. 

Some  reference  should  always  be  made  to  the  letter  which 
is  being  answered,  but  in  order  to  secure  the  best  effect  this 
reference  should  be  made  incidentally.  Such  opening  phrases 
as  "Your  esteemed  letter  of  the  10th  inst.  is  received  and  in 
reply  would  say"  are  overworked  and  should  be  avoided.  They 
are  used  by  those  who  have  fallen  into  a  rut,  or  by  those  who 
lack  originality.  It  would  serve  your  purpose  better  to  open 
your  letter  somewhat  as  follows :  "The  suggestion  contained 
in  your  letter  of  the  15th  inst.  meets  with  my  entire  approval," 
or  some  similar  opening  that  would  be  in  conformity  with 
the  letter  to  which  you  are  replying. 

It  is  an  inexcusable  mistake  to  fail  to  date  a  letter.  With- 
out the  date  a  letter  is,  in  many  cases,  of  no  value.  Especially 
is  this  so  should  it  be  necessary  to  bring  the  letter  into  court 
for  the  verification  of  some  transaction  about  which  the  letter 
may  have  been  written.  The  heading,  including  the  date, 
should  be  written  before  taking  up  the  body  of  the  letter. 

A  letter  should  always  contain  the  complete  address  of  the 
writer,  even  though  you  are  corresponding  with  those  who 
may  reasonably  be  expected  to  know  your  address.  This 
precaution  often  saves  time  and  money,  and  preserves  friend- 
ship. 

A  business  letter  should  be  as  brief  as  the  nature  of  the 
subject  about  which  you  are  writing  will  permit.  If  you  are 
ordering  goods  by  letter,  you  should  clearly  set  forth  the 
nature  of  the  articles  you  desire,  the  way  you  wish  to  have 
them  shipped,  whether  by  express  or  freight,  or  whether  they 
should  be  sent  by  mail.  (See  model  on  page  133.)  If  you  are 
a  regular  customer  of  the  firm,  and  have  an  account  with 
them,  you  should  clearly  state  the  terms  on  which  you  desire 
to  make  this  particular  purchase.  However,  should  it  be  your 
first  order,  you  should  either  make  sufficient  remittance  to 
cover  the  amount  of  the  order  or  give  some  responsible  person 
as  reference. 

Should  you  be  seeking  information  by  letter,  ask  for  that 
information  in  much  the  same  way  as  though  you  were  talking 


THE   BUSINESS   LETTER  133 

to  the  person.  At  all  times  be  courteous,  but  do  not  try  to 
overdo  it.  In  writing  to  a  person  about  a  subject  in  which 
he  is  not  directly  interested,  you  should  inclose  a  self -addressed 
stamped  envelope  for  his  reply. 

Remittances  and  Orders 

Remittances  in  the  form  of  currency  should  never  be  sent 
through  the  ordinary  letter.  This  is  not  only  unsafe,  but  the 
sender  has  no  evidence  that  the  amount  in  question  was  sent 
or  that  the  person  to  whom  it  was  sent  received  it.  You 
should  choose  as  the  safest  and  most  convenient  way  of  mak- 
ing a  remittance  one  of  the  following  methods :  Postal  money 
order,  express  money  order,  registered  letter,  check,  or  bank 
draft.  Probably  the  most  convenient  method  to  those  who 
live  in  rural  districts  would  be  the  postal  money  order. 

In  making  a  remittance,  no  matter  how  small  the  amount, 
you  should  state  in  your  letter  accompanying  the  remittance 
for  what  it  is  intended,  the  exact  amount,  the  nature  of  the 
remittance,  whether  it  is  a  check,  money  order,  or  otherwise. 

Model    Order 

Sterling,  Illinois,  June  15,  1910. 
Ginn  &  Company,  Publishers, 

2301-2311  Prairie  Avenue, 

Chicago,  Illinois. 
Gentlemen : — 

I  inclose  herewith  postal  money  order  for  $4.72,  for 

which  please  send  me,  by  prepaid  express,  the  following  books: — 

The  Working  Principles   of   Rhetoric,   by   John  F. 

Genung,  12mo,  cloth,  price  $1.40; 
Lockwood  and  Emerson's  Composition  and  Rhetoric, 

12mo,  cloth,  price  $1.00; 
Library   of   Anglo-Saxon   Poetry,    Vol.    I.   Beowulf, 

12mo,  cloth,  price  $1.12; 
Allen  and  Greenough's  New  Latin  Grammar,  12mo, 
half  leather,  price  $1.20. 
I  should  like  to  have  these  books  reach  me  not  later 
than  the  20th  inst.,  as  I  expect  to  use  them  in  my  summer 
school  work  beginning  on  the  21st. 

Yours  truly, 
Inclosure.  Student  &  Company. 


134  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

Where  more  than  one  item  is  ordered  in  a  letter,  as  in  the 
foregoing  model,  it  is  better  to  write  them  in  a  line  or  column, 
that  is,  assigning  to  each  item  a  separate  paragraph,  followed 
with  a  complete  description  of  the  item,  including  the  price, 
number,  size,  color,  weight,  and  any  other  information  that 
would  insure  your  securing  just  what  you  wanted. 

Taste  and  Neatness 

As  suggested  elsewhere,  the  writer  should  throw  his  own 
originality  into  his  letters;  but  it  must  be  steadily  kept  in 
mind  that  this  must  not  be  done  in  a  haphazard,  careless 
manner.  One  of  the  purposes  of  a  letter  is  to  get  action.  In 
order  to  do  this  the  writer  must,  if  possible,  put  himself  in 
the  place  of  the  receiver  of  the  letter  and,  having  done  this, 
carefully  consider  just  what  it  would  be  necessary  for  some  one 
else  to  do  or  say  to  get  the  desired  action  from  himself.  It 
would  be  quite  impossible  to  lay  down  definite  rules  as  to  just 
how  this  should  be  done,  but  I  am  sure  all  will  agree  that  the 
letter  should  be  free  from  misspelled  words,  ink  blotches, 
grammatical  errors,  slang,  undue  criticism,  sweaty  or  dirty 
finger  prints,  or  any  other  similar  defects  that  would  be  un- 
pleasant to  the  eye. 

A  business  woman  writing  to  a  stranger  should  never  neg- 
lect to  prefix  to  her  signature  the  title  Miss  or  Mrs.  in 
parenthesis.  It  is  embarrassing  to  both  the  writer  and  the 
person  who  receives  the  letter,  should  a  woman  be  addressed 
as  Mr.  In  case  a  letter  is  received  where  it  is  evident  that  the 
writer  is  a  woman,  but  she  has  merely  signed  "Mary  Jones," 
omit  the  title  and  address  her:  "Mary  Jones,  Cedar  Rapids, 
Iowa,  Dear  Madam : — " 

It  is  not  supposed  that  those  for  whom  this  is  intended 
would  have  the  time  to  go  into  the  real  science  of  letter 
writing,  as  do  the  great  majority  of  the  large  manufacturing 
concerns  of  the  country  who  conduct  extensive  advertising 
campaigns,  and  for  this  reason  our  suggestions  cover  merely 
those  points  it  is  thought  would  be  of  assistance  to  the  ma- 
jority of  those  who  are  pursuing  this  course. 

The  letter  should  be  arranged  artistically  on  the  page.  You 
should  endeavor  to  arrange  the  letter  so  that  there  will  be  an 


THE   BUSINESS   LETTER  135 

equal  blank  space  at  the  top  and  at  the  bottom  of  the  page. 
If  the  letter  is  short,  wider  left  and  right  hand  margins  should 
be  allowed  so  that  the  letter  will  occupy  more  vertical  space, 
and  thus  avoid  a  stringy  appearance. 

If  letter  paper  is  used,  size  Sh  x  11  inches,  the  indentations 
for  introductory  address  and  paragraphs  should  be  deeper 
than  when  note  paper,  usually  about  8^x5^  inches,  is  used. 
When  letter  paper  is  used,  the  indentations  should  be  about 
three  fourths  inch;  when  using  note  paper,  the  indentations 
should  be  about  one  half  inch. 

Paging 

If  more  than  one  page  is  required  for  a  letter,  each  page, 
except  the  first,  should  be  numbered  in  the  order  in  which  it 
is  written.  Before  the  letter  is  inclosed  in  the  envelope  the 
pages  should  be  arranged  in  the  order  in  which  they  should 
be  read. 

The  Paragraph 

A  series  of  connected  sentences  treating  of  a  single  topic 
make  what  is  called  a  paragraph.  In  letters,  as  in  other 
forms  of  composition,  the  change  from  the  discussion  of  one 
topic  to  another  should  be  indicated  by  an  indented  line,  which 
catches  the  eye  of  the  reader  and  tells  him  that  another  topic 
is  to  be  considered. 

The  Postscript    . 

The  postscript  is  an  afterthought  or  a  statement  added  for 
emphasis  after  the  body  of  the  letter  has  been  finished.  The 
postscript  should  be  indented  the  same  as  paragraphs,  and 
should  begin  on  the  second  line  beneath  the  signature.  It 
should  be  preceded  by  "P.  S."  and  followed  by  the  initials  of 
the  writer. 

Study  the  arrangement  of  the  following  letter: — 

Corvallis,  Oregon,  July  15,  1910. 
The  Home  Beal  Estate  Co., 

Forest  Grove,  Oregon. 
Gentlemen : — 

In  accordance  with  our  agreement  of  June  15th,  I  am 
sending  you  attached  hereto  my  personal  check,  No.  68,  on 


136  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

the  First  National  Bank  of  Corvallis,  for  $42.43,  to  be  applied 
as  follows: — 

$40.00  in  payment  of  the  first  monthly  installment  due 
on  residence  lot  No.  6,  Block  E,  Wilkinson's  addition  to  the 
City  of  Forest  Grove,  Oregon ;  $2.42  in  payment  of  the  interest 
on  the  remaining  eleven  monthly  installments  of  $40.00  each. 

Kindly  send  me  credited  coupon  for  the  first  installment 
and  interest. 

Yours  truly, 


Inclosure. 

EXERCISE  6 

1.  Make  up  and  write  the  heading,  introductory  address, 
salutation,  and  complimentary  close  for  five  different  letters, 
referring  to  the  models,  if  necessary,  for  the  correct  forms. 

2.  Write  a  letter,  dated  at  your  home,  ordering  five  dif- 
ferent articles  of  merchandise. 

3.  You  were  at  your  county  seat  several  days  ago  and 
ordered  your  local  paper.  You  have  not  yet  received  a  copy. 
Write  a  courteous  letter  to  the  editor  requesting  him  to  inves- 
tigate the  delay  and  to  send  the  paper  to  your  address  regu- 
larly until  notified  to  discontinue  it. 

4.  In  the  early  part  of  the  harvest  season  you  purchased 
farm  implements  of  a  hardware  dealer  of  your  city,  amounting 
to  $175.50.  It  is  now  nearing  the  time  that  you  agreed  to 
make  the  second  payment  of  $75.00.  Your  grain  yield  has 
not  been  as  large  as  you  expected,  and,  owing  to  certain 
other  obligations  you  must  meet,  you  have  found  it  necessary 
to  ask  for  an  extension  of  time  on  at  least  half  of  the  amount. 
Write  him  a  letter  explaining  your  situation  and  ask  for  the 
extension  of  time. 

5.  Your  hardware  dealer  has  agreed  to  accept  $40.00  and 
to  grant  an  extension  of  thirty  days  on  the  balance.  Write 
him  a  letter  thanking  him  for  the  extension  and  inclose  your 
check  for  $40.00.     Call  attention  to  the  remittance. 

FOLDING  THE  LETTER. 
Paper 

There  are  two  sizes  of  business  letter  paper,  namely,  letter 
size,   8i  X 11   inches,   and  note   size,   usually   8^  x  5i    inches. 


THE   BUSINESS   LETTER  137 

though  the  size  of  note  paper  varies.     The  larger  size  is  gen- 
erally used  by  business  houses. 

Folding 

The  following  is  the  correct  method  of  folding  letter  paper : 
(1)  Turn  the  lower  edge  up  to  within  a  half  or  quarter  of  an 
inch  of  the  top,  then  crease  the  fold,  being  very  careful  that 
the  side  edges  of  the  paper  are  exactly  even.  The  reason  for 
not  allowing  the  bottom  and  top  edges  of  the  paper  to  be  even 
is  to  make  the  unfolding  of  the  letter  easier,  and  without  loss 
of  time.  (2)  With  the  creased  edge  of  the  letter  toward  you, 
fold  over  the  right  edge  a  little  less  than  one  third,  being 
careful  to  keep  the  creased  edges  of  the  first  and  second  folds 
even.  (3)  Fold  over  the  left  edge  a  little  less  than  one  third, 
overlapping  the  second  fold.  The  second  and  third  folds 
should  be  of  equal  width.  The  middle  fold  should  be  a  little 
narrower  than  the  envelope  into  which  the  letter  is  to  be 
inserted,  and  a  little  wider  than  either  the  right  or  left  hand 
fold. 

Inserting  the  Letter 

The  letter  is  now  ready  to  be  put  into  the  envelope.  Take 
the  envelope  in  the  left  hand  with  its  back  up  and  the  flap 
opening  toward  the  right.  Take  the  letter  in  your  right  hand 
with  the  folded  edges  up.     Insert  first  the  edge  folded  last. 

In  opening  a  book  the  left-hand  cover  is  usually  opened  first. 
Through  the  unconscious  training  of  years  you  do  this  without 
apparent  thought.  Why?  Because  it  is  the  natural  way. 
The  letter  should  be  folded  and  put  into  the  envelope  in  accord- 
ance with  the  preceding  instructions  in  order  to  enable  the 
person  who  receives  it  to  unfold  it  and  begin  reading  without 
loss  of  time. 

In  large  business  houses  where  hundreds  of  letters  are 
received  daily,  the  letters  are  usually  placed  on  a  table,  back 
uppermost,  and  opened  by  inserting  a  paper  knife  beneath  the 
closing  fold  and  slitting  all  the  way  along  the  top  edge. 

In  folding  note  paper,  first  fold  the  bottom  edge  up  a  little 
less  than  one  third,  then  fold  the  top  edge  down  a  little  less 
than  one  third,  overlapping  the  bottom  fold.  With  the  en- 
velope held  in  the  same  position  as  when  inserting  the  larger 


138   BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

size  paper,  with  the  folded  edges  of  the  letter  up,  insert  first 
the  edge  folded  last. 

The  Knvelope 

Great  care  should  be  exercised  in  writing  the  directions  on 
the  envelope.  In  the  first  place,  the  name  of  the  person  to 
whom  you  are  writing  should  appear  in  the  introductory 
address  of  the  letter  just  as  he  is  accustomed  to  spell  it, 
then  it  should  be  written  on  the  envelope  just  as  it  is  in  the 
introductory  address,  followed  in  the  order  named  by  the 
street  and  house  number,  post  office,  and  state.  Should  the 
name  be  followed  by  more  than  one  title,  they  should  be 
separated  by  commas. 

The  Return  Card 

Every  letter  you  mail  should  bear  your  return  card  in  the 
upper  left-hand  corner  of  the  envelope.  If  the  envelope  bear 
your  name  and  address  only,  the  letter  should  be  returned  to 
you  at  the  end  of  thirty  days,  provided  it  is  not  called  for 
within  that  time.  If  it  is  desired  to  have  the  letter  return 
to  you  within  a  specified  time,  provided  it  is  not  called  for,  the 
words  "If  not  called  for  within  —  days,  return  to,"  followed 
by  your  name  and  address,  will  insure  its  return  to  you  in 
case  it  is  not  called  for.  Should  the  envelope  not  bear  your 
name  and  address,  and  remain  uncalled  for  for  thirty  days,  it 
will  be  forwarded  to  the  dead  letter  office. 

The  Stamp 

The  stamp  should  be  placed  in  the  upper  right-hand  corner 
of  the  face  of  the  envelope.  It  should  be  firmly  attached  and 
the  edges  of  the  stamp  should  be  about  one  eighth  of  an  inch 
from,  and  parallel  to,  the  edges  of  the  envelope. 

The  following  are  good  models : — 


THE   BUSINESS   LETTER 


139 


(1) 


SUmp 


Mr.  Karl  L.  Goodall, 

Corvallis, 

Oregon. 


(2) 

sump 

Armour  Packing  Company, 

Chicago,  Illinois. 

(3)                                -     j 

sump 

Gregg  Publishing  Company, 

151  Wabash  Avenue, 

Chicago,  111. 

(4) 


Mr.  Harvey  H.  Burnham, 

Cottage  Grove, 

Oregon. 


c/o  Imperial  Hotel. 


140  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

EXERCISE  7 
Write  the  following  envelope  addresses,  using  blank  slips 
of  paper  the  size  of  a  regular  business   envelope — 3^  x  6^ 
inches : — 

1.  Mr.  R.  P.  Smith,  Logan,  Utah. 

2.  Mrs.  Raymond  H.  White,  728  Seventh  Street,  Lev^iston, 
Idaho. 

3.  Miss  Gertrude  Hamilton,  Beaver  Creek,  Oregon. 

4.  Henry  H.  Lathrop,  Thacker,  West  Virginia. 

The  punctuation  marks  are  omitted  in  the  following  in  order 
to  give  the  student  practice  in  inserting  them : — 

5.  Rev  James  R  Hamilton  Pastor  First  M.  E.  Church 
Spokane  Washington. 

6.  Hon.  J.  H.  Ackernan  State  Supt  of  Schools  Salem 
Oregon 

7.  Prof  G.  H.  Patterson  Care  Willamette  University  Salem 
Oregon 

8.  Mr  Geo  W  Mathews  Association  Hall  University  of 
Wisconsin  Madison  Wisconsin 

9.  The  Home  Correspondence  School  Springfield  Mass 

10.  Mr.  Frederick  M.  Bollinger  Transient  St  Paul  Ne- 
braska. 

Note. — In  writing  to  a  person  who  is  stopping  in  a  city  only 
temporarily  where  the  free  delivery  system  is  in  operation, 
the  word  "Transient"  or  "General  Delivery"  should  be  written 
in  the  lower  left-hand  corner  of  the  envelope. 


CHAPTER  X 

BUSINESS    FORMS 

Every  farmer,  mechanic,  and  professional  man  should  un- 
derstand the  ordinary  business  forms  in  daily  use.  It  is  often 
a  matter  of  humiliation  to  persons  of  superior  ability  in  other 
lines  to  acknowledge  that  they  are  ignorant  of  the  proper 
form  of  a  simple  business  paper.  The  purpose  of  this  chapter 
is  to  give  models  and  explanations  of  the  forms  likely  to  be 
used  by  every  business  man. 

The  Invoice 

An  invoice  is  an  itemized  statement  of  goods  bought  or 
sold.  It  should  contain  detailed  information  regarding  date, 
parties,   quantity  and  description  of  the  goods,  prices,   dis- 


A         Marshal  ItownrJp 


■■ /C- 


MERRITT   GREENE   &  SON 

"eOGWORTH"  FARM. 
•'I.INN  BROOK"  FARM 
UINN    BROOK    DAIRY    CO 


^/6 


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l/f-/  ^ 


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-^ 


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c^ 


/O     ^^oZi^    ^:^CL~Y 


/Z.cd 


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M^S^ 


^.^,^ 


M-t^^Jif. 


^22JL&±i.^ 


?^g<^ 


MODEL  INVOICE 

(141) 


142   BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

counts  or  terms,  how  the  goods  are  shipped,  by  whom  packed, 
etc.     If  paid,  it  should  be  properly  receipted. 

EXERCISE  8 

Write  invoices  for  all  the  sales  in  Lesson  20.  Use  Journal 
paper,  or  rule  the  required  form. 

The  Statement 

A  statement  is  an  abstract  of  the  debits  and  credits  of  an 
account.  It  should  contain  the  items  as  they  appear  in  the 
Ledger,  arranged,  so  as  to  show  at  a  glance  the  condition  of 
the  account.  The  statement  is  often  confined  to  the  balance 
due,  but  this  form  is  seldom  satisfactory.     [See  page  143.) 

EXERCISE  9 

Write  statements  of  all  the  open  accounts  receivable  after 
closing  the  Ledger  in  Lesson  20.  Use  Journal  paper  or  rule 
the  required  form. 

The  Receipt  • 


A  receipt  should  always  be  taken  when  a  payment  is  made, 
unless  it  is  made  by  check,  in  which  case  the  indorsement 
constitutes  receipt.  It  should  give  the  name  of  the  parties, 
the  amount  paid,  when  and  for  what  it  is  made.  A  dupli- 
cating receipt  book  should  be  used  when  a  large  number  of 
receipts  are  given. 


BUSINESS   FORMS 


143 


low«^  ^^4<W^ 


6 190/ 


Marshal Itown.  \^'m^. 
V'^'^«'^-^-<?  v'  V:?^'^'^*-''^*-'^. 

in  account  with 

MERRITT   GREENE   &  SON 


"EDGWORTH"     FARM, 

"LINN     BROOK"     FARI^I 

LINN    BROOK    DAIRY    CO. 


/> 


/I 


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i4 


MODEL  STATEMENT 


144   BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

EXERCISE  10 

Write  receipts  for  all  the  cash  received  in  Lesson  20,  using 
slips  3x6  inches. 

The  Promissory  Note 


gg3^3na[vS3ia&s:-aMai>jLLajj«a5a<««^<fi 


A  promissory  note  is  a  written  contract  for  the  payment 
of  a  specified  amount  at  a  given  time  and  place,  with  or 
without  interest.  When  it  is  made  to  the  order  of  the  payee, 
it  becomes  a  negotiable  paper.  The  parties  to  a  note  are 
the  maker  (Duncan),  who  obligates  himself  to  pay;  the  payee 
(Hamilton),  in  whose  favor  the  note  is  drawn;  and  the 
indorsers,  who  transfer  the  note  to  other  parties.  The  first 
indorser  is  always  the  payee.  The  law  relating  to  negotiable 
instruments  is  very  important  and  should  be  thoroughly  un- 
derstood by  all  who  use  them.  It  is  too  technical  and  exten- 
sive to  be  discussed  here.  No  note  should  be  given  unless  its 
terms  are  thoroughly  understood  by  both  parties. 

EXERCISE  11 

Draw  notes  for  every  transaction  involving  a  note  in  Lesson 
20.  Use  slips  of  paper  3x6  inches.  Be  sure  to  fill  out  the 
vacant  space  in  the  amount  line.  When  this  is  not  done,  the 
amount  is  often  raised  by  forgers. 

The  Check 

A  check  is  a  form  of  draft  by  which  a  depositor  draws 
money  from  a  bank.  It  has  the  same  parties  and  the  same 
legal  aspects  as  the  draft.  The  increasing  use  of  the  bank 
by  all  classes  for  facilitating  business  makes  this  one  of  the 


BUSINESS   FORMS 


145 


m^'^r<fy",  ^X^y7^<^li^7yAe^^    ,^f// 


most  important  of  negotiable  instruments.  The  law  govern- 
ing its  use  should  be  thoroughly  understood.  Checks  should 
be  written  in  ink,  the  amount  should  be  written  in  both 
words  and  figures.  All  checks  should  be  numbered.  It  is 
sometimes  desirable  for  the  payee  to  require  a  certification 
from  the  bank  that  the  check  is  good.  The  form  of  this 
certificate  is  given  in  the  model.  It  has  the  same  effect  as 
the  acceptance  of  the  draft.  When  a  check  is  certified,  the 
bank  is  responsible  for  the  amount. 

EXERCISE  12 
Write  checks  for  all  the  payments  in  Lesson  20. 


1,  ^.(Pc^^^JPi^o. 


^czZ:^- 


A  draft  is  a  written  o-rder  by  one  person  on  another  to  pay 
money  to  a  third  person.  It  is  a  time  or  sight  draft,  according 
to  the  time  specified  for  payment.     If  it  reads,  as  in  the  illus- 


146  BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 


tration,  ''At  ten  days'  sight,"  it  is  payable  ten  days  after 
acceptance  and  is  called  a  time  draft;  if  it  reads  "At  sight," 
it  is  payable  upon  presentation  and  is  called  a  sight  draft. 
It  is  a  bank  draft  if  issued  by  one  bank  on  another;  an  indi- 
vidual draft  when  issued  by  a  firm  or  individual  on  another 
firm  or  individual.  The  parties  to  a  draft  are :  The  drawer 
(Bliss),  who  orders  the  payment;  the  drawee  (Eagan),  who 
pays;  the  payee  (Neagle),  in  whose  favor  the  draft  is  drawn; 
and  the  indorsers,  who  transfer  the  draft  to  others.  The 
payee  is  always  the  first  indorser.  The  indorsement  should 
be  made  on  the  back  of  the  left  end  of  the  draft.  If  merely 
the  name  is  written,  it  is  a  blank  indorsement  and  may  be 
paid  to  any  one  upon  presentation;  if  the  indorsement  reads 
"Pay  to  the  order  of  John  Doe,"  the  amount  can  be  paid  only 
to  the  party  designated  by  Doe  and  is  called  a  full  indorse- 
ment.    The  draft  is  a  negotiable  paper  if  payable  "to  the 

order  of "  or  "to  bearer"  and  is  subject  to  the  laws  of 

negotiable  instruments.  When  the  drawee  signifies  his  will- 
ingness to  pay  a  time  draft,  he  "accepts"  it  as  shown  in  the 
model.  The  acceptance  has  the  same  force  as  the  signing  of 
a  note.  The  law  of  negotiable  instruments  should  be  studied 
very  thoroughly  by  every  business  man. 

EXERCISE  13 
Write  the  draft  called  for  under  June  11,  Lesson  16. 

The  Certificate  of  Deposit 


A  certificate  of  deposit  is  a  receipt  issued  by  a  bank  for  a 
temporary  deposit.     It  is  discussed  here  only  to  emphasize  the 


BUSINESS   FORMS 


147 


great  importance  of  establishing  banking  connections.  If,  for 
any  reason,  it  is  impracticable  to  open  a  regular  bank  account, 
as  discussed  on  page  25,  any  money  not  needed  for  current 
use  should  be  deposited  on  a  certificate.  If,  as  in  the  model, 
the  deposit  is  allowed  to  remain  for  a  definite  period,  interest 
will  be  allowed  at  the  current  rate.  Withdrawals  are  usually 
allowed  by  indorsement  of  the  amount  on  the  certificate,  but 
not  by  check.  A  certificate  of  deposit  is  usually  issued  *'to 
the  order  of ,"  and  is  therefore  transferable  by  indorse- 
ment. 

The  Voucher  Check 


/.  lu.i»r:<Aft:»a^  Oi//  2    P/ou/y  J.  /^ai/sj-i>rje»(e   ■  d/.  S^y^yi*,^  /f. 


Ut^Yu.) 


The  voucher  check  is  an  exceedingly  convenient  form,  espe- 
cially in  corporate  business.  By  referring  to  the  illustration 
above,  it  will  be  seen  that  it  consists  of  an  ordinary  check 
on  one  side,  with  a  blank  for  the  signature  of  the  president  or 
some  other  officer  authorized  to  approve  vouchers.  The  bank 
should  be  instructed  to  refuse  payment  unless  the  check  is 


148   BUSINESS  ORGANIZATIONS,  CORRESPONDENCE,  FORMS 

approved  or  countersigned.  The  back  provides  for  the  distri- 
bution of  the  payments,  and  from  this  the  entries  are  made 
in  the  records.  Space  is  left  for  indorsements  on  the  left  end 
of  the  back.  The  indorsement  shown  on  the  model  constitutes 
a  satisfactory  receipt  in  most  cases.  When  a  definite  invoice 
or  other  item  is  paid,  it  is  well  to  specify  the  date  or  number, 
as  illustrated.  Never  fail  to  number  your  checks  consecu- 
tively. 

EXERCISE  14 

Prepare  three  different  forms  of  voucher  checks,  modified 
to  suit  your  own  ideas.     Let  one  be  similar  to  the  model. 


PART   IV 
USEFUL  TABLES 


USEFUL  TABLES 


TABLE  1 

Six  Per  Cent.  Interest  Table 

Time 

$1 

$2 

$3 

$4 

$5 

$6 

$10 

$20 

$50 

$100 

$1000 

r    1 

0 

0 

0 

0 

0 

0 

0 

0 

1 

2 

17 

2 

0 

0 

0 

0 

0 

0 

0 

1 

2 

3 

34 

3 

0 

0 

0 

0 

0 

0 

1 

3 

5 

50 

4 

0 

0 

0 

0 

0 

0 

1 

3 

7 

67 

5 

0 

0 

0 

0 

0 

0 

2 

4 

8 

83 

6 

0 

0 

0 

0 

2 

5 

10 

1.00 

7 

0 

0 

0 

0 

2 

6 

12 

1.17 

a.       8 

0 

0 

0 

3 

7 

13 

1.33 

%     9 

0 

0 

0 

2 

3 

8 

15 

1.50 

«   10 

0 

0 

1 

2 

3 

8 

17 

1.67 

15 

0 

1 

1 

2 

3 

5 

13 

25 

2.50 

20 

0 

1 

1 

2 

2 

3 

7 

17 

33 

3.33 

25 

0 

1 

1 

2 

2 

2 

4 

8 

21 

42 

4.17 

30 

1 

1 

2 

2 

3 

3 

5 

10 

25 

50 

5.00 

33 

1 

1 

2 

2 

3 

3 

6 

11 

28 

55 

5.50 

63 

1 

2 

3 

4 

5 

6 

11 

21 

53 

1.05 

10.50 

93 

2 

3 

5 

6 

8 

9 

16 

31 

78 

1.55 

15.50 

r    1 

1 

1 

2 

2 

3 

3 

5 

10 

25 

50 

5.00 

2 

1 

2 

3 

4 

5 

6 

10 

20 

50 

1.00 

10.00 

3 

2 

3 

5 

6 

8 

9 

15 

30 

75 

1.50 

15.00 

4 

2 

4 

6 

8 

10 

12 

20 

40 

1.00 

2.00 

20.00 

cc      5 

3 

5 

8 

10 

13 

15 

25 

50 

1.25 

2.50 

25.00 

g     6 

3 

6 

9 

12 

15 

18 

30 

60 

1.50 

3.00 

30.00 

§     7 

4 

7 

11 

14 

18 

21 

35 

70 

1.75 

3.50 

35.00 

^     8 

4 

8 

12 

16 

20 

24 

40 

80 

2.00 

4.00 

40.00 

9 

5 

9 

14 

18 

23 

27 

45 

90 

2.25 

4.50 

45.00 

10 

5 

10 

15 

20 

25 

30 

50 

1.00 

2.50 

5.00 

50.00 

11 

6 

11 

17 

22 

28 

33 

55 

1.10 

2.75 

5.50 

55.00 

.  12 

6 

12 

18 

24 

30 

36 

60 

1.20 

3.00 

6.00 

60.00 

Example. - 
Solution  : 

-Find  the  interest  on  $340.00  at  8%  for  8  months  and  8  days. 
At  6%  the  interest  on 

$300.00  for  8  mos. 

"    8  days 

40.00    "    8  mos. 

"    8  days 

=  3  X 

=  3  X 
=  4  X 
=  4  X 

$4.00  or 
.13  or 
.40  or 
.01  or 

$12.00 

.39 

1.60 

.04 

Total. 
Add  K  to  produce  8%, 

$14.03 
4.68 

Answer. 


$18.71 


(151) 


152  USEFUL   TABLES 


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USEFUL   TABLES 


153 


TABLE  3 


Interest  Table 

The  following  will  be  found  convenient  in  the  absence  of 
extended  interest  tables.  To  find  the  interest  on  a  given  sum, 
for  any  number  of  days,  at  any  rate  of  interest : — 


5% 
6% 
7% 


At 
At 
At 
At 
At  9% 
At  10% 
At  12% 
At  15% 
At  20% 


multiply 
multiply 
multiply 
multiply 
multiply 
multiply 
multiply 
multiply 
multiply 


principal 
principal 
principal 
principal 
principal 
principal 
principal 
principal 
principal 


by  number 
by  number 
by  number 
by  number 
by  number 
by  number 
by  number 
by  number 
by  number 


of  days, 
of  days, 
of  days, 
of  days, 
of  days, 
of  days, 
of  days, 
of  days, 
of  days. 


divide 
divide 
divide 
divide 
divide 
divide 
divide 
divide 
divide 


by  72 
by  60 
by  52 
by  45 
by  40 
by  36 
by  30 
by  24 
by  18 


TABLE  4 


•  Minimum  Weights  of  Produce 

The  following  are  minimum  weights  of  certain  articles  of 
produce  according  to  the  laws  of  the  United  States : — 


Lbs.  per  Bushel 

Wheat    60 

Corn,  in  the  ear 70 

Corn,  shelled 56 

Rye 56 

Buckwheat 48 

Barley    48 

Oats    32 

Peas   60 

White  Beans 60 

Castor  Beans 46 

White  Potatoes 60 

Sweet  Potatoes 55 

Onions    57 

Turnips    55 


Lbs.  per  Bushel 

Dried   Peaches 33 

Dried  Apples 26 

Clover  Seed 60 

Flax  Seed 56 

Millet  Seed 50 

Hungarian  Grass  Seed ....  50 

Timothy  Seed 45 

Blue  Grass  Seed 44 

Hemp  Seed 44 

Salt  (see  note  below). 

Corn  Meal 48 

Ground  Peas 24 

Malt    34 

Bran 20 


SALT.— Weight  per  bushel  as  adopted  by  different  States  ranges  from  50  to  80  pounds. 
Coarse  salt  in  Pennsylvania  is  reckoned  at  80  pounds,  and  in  Illinois  at  50  pounds  per  bushel. 
Fine  salt  in  Pennsylvania  is  reckoned  at  62  pounds,  in  Kentucky  and  Illinois  at  55  pounds  per 
bushel. 


154  USEFUL  TABLES 

TABLE  5 


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USEFUL   TABLES 


155 


TABLE  6 


Common  Measures 


Long  Measure 

12  inches  =  1  foot. 

3  feet  =  1  yard. 
5i  yards  =  1  rod. 

320  rods  =  1  mile. 
1  mile  =  5,280  feet. 

The  following  are  also 
used : — 

1  size  =  i  inch. 

(Used  by  shoemakers.) 

1  hand  =  4  inches. 

(Used  in  measuring  the  height 

of  horses.) 

1  fathom  =  6  feet. 

(Used  in  measuring  depths  at 

sea.) 

1  knot  =  1.15  miles. 
(Used  in  measuring  distances 

at  sea.) 

Dry  Measure 

2  pints  =  1  quart. 
8  quarts  =  1  peck. 

4  pecks  =  1  bushel. 

1  bushel  contains  2,150.42 
cubic  inches  or  approximately 
li  cubic  feet. 

Liquid  Measure 

4  gills  =  1  pint. 

2  pints  =  1  quart. 

4  quarts  =  1  gallon. 

1  gallon  contains  231  cubic 
inches. 

1  cubic  foot  equals  7^  gal- 
lons. 


Square  Measure 

144  square  inches  =  1  square 

foot. 
9  square  feet  =  1   square 

yard. 
30i  square  yards  =  1  square 

rod. 
160  square  rods  =  1  acre. 
640  acres  =  1  square  mile. 

An  acre  is  equal  to  a  square 
whose  side  is  208.71  feet. 

Surveyors'  Linear  Measure 

7.92  inches  =  1  link. 
100  links  =  1  chain. 
80  chains  =  1  mile. 
Gunter's  chain  is  the  unit 
and  is  66  feet  long. 

Surveyors'  Square 
Measure 

10,000  square  links  =  1  sq. 

chain. 
10  square    chains    =    1 

acre. 
10  chains    square    =    10 

acres. 


Cubic  Measure 

1,728  cubic  inches  =  1  cubic 
foot. 
27  cubic  feet  =  1  cubic  yd. 
128  cubic  feet  =  1  cord. 


156  USEFUL  TABLES 

TABLE  7 

Housekeepers*  Timetable 

*,  minutes  to  the  pound.  The  time  given  is  the  general  average  ;  the  time  will  vary  slightly 
with  the  quality  of  the  article,  b,  boiled  ;  f,  fried  ;  bk,  baked  ;  br,  broiled  ;  s,  stewed  ;  r, 
roasted. 

Hours.  Min. 

Asparagus,  b 15-30 

Beans,  b 1                — 

Beans  with  green  corn,  b 45 

Beef,  r *25 

Beefsteak,  br.  or  f 15 

Beef,  salted,  b 35 

Bass,  fresh,  br 20 

Beets,  young,  b 2                — 

Beets,  old,  b 4                 30 

Bread,  corn,  bk 45 

Bread,  wheat,  bk 1                — 

Cabbage,  b 1                — 

Cauliflower,  b 30 

Cake,  sponge,  bk 45 

Carrot,  orange,  b 1                — 

Chicken,  b 1                — 

Codfish,  dry  and  whole,  b *15 

Custard  (one  quart),  bk 1                 20 

Duck   (tame),  r 1                 30 

Duck  (wild)  ,r 1                — 

Dumpling,  apple,  b 1                 — 

Eggs,  hard  b 10 

Eggs,  soft  b 3 

Eggs,  f 5 

Fowls,  domestic,  r.  or  b 1                — 

Goose,  wild,  r *20 

Lamb,  b *20 

Meat  and  vegetables,  hashed 30 

Mutton,  r *25 

Mutton,  br 20 

Onions,  b 30 

Oysters,  s 5 

Parsnips,  b 1                — 

Pork,  r *30 

Pork,  b *25 

Potatoes,  b 30 

Potatoes,  bk 45 

Potatoes,  r 45 

Rice,  b 20 

Salmon,  fresh,  b 8 

Sausage,  f 25 


USEFUL   TABLES                  *  157 

Hours  Min. 

Sausage,  br 20 

Soup,  vegetable,  b 1                — 

Soup,  chicken,  b .  .  . 2                 — 

Soup,  oyster  or  mutton,  b 3                 30 

Spinach,  b 30 

Tapioca,  b 1                30 

Tomatoes,  fresh,  b 1                 — 

Tomatoes,  canned,  b 30 

Trout  or  salmon,  b.  or  f 30 

Turkey,  br.  or  r *20 

Turnips,  b .       45 

Veal,  br 20 

Venison  steak,  br $  20 


TABLE  8 


Weights  and  Measures  iu  Ordinary  Use 

3  level  coffee  cups  sifted  flour  =  1  pound. 

2  level  coffee  cups  pulverized  sugar  =  1  pound. 
Ih  level  coffee  cups  granulated  sugar  =  1  pound. 
1|  level  coffee  cups  '*A"  sugar  =  1  pound. 

4  scant  teacups  sifted  flour  =  1  pound. 

2  scant  teacups  soft  butter,  packed  =  1  pound. 

2  scant  teacups  granulated  sugar  =  1  pound. 
2i  scant  teacups  brown  sugar  =  1  pound. 

8  or  10  ordinary  eggs  =  one  pound. 

4  teaspoonfuls  =  1  tablespoonful,  liquid. 

4  tablespoonfuls  =  1  wineglass  or  half  a  gill. 

2  wineglasses  =  1  gill  or  half  a  cup. 

2  gills  =  1  coffee  cupful  or  16  tablespoonfuls. 

2  coffee  cupfuls  =  1  pint. 

2  pints  =  1  quart. 

4  quarts  ==  1  gallon. 

2  tablespoonfuls  =  1  ounce,  liquid. 

1  tablespoonful  salt  =  1  ounce. 
16  ounces  =  1  pound  or  a  pint  of  liquid. 
25  drops  of  thin  liquid  ^=  1  common  teaspoonful. 

1  pint  of  finely  chopped  meat,  packed  solidly  =  1  pound. 


158 


USEFUL   TABLES 


TABLE  9 
Gestation  or  Birth  Table 


Date  of 
Service. 

January    1 

"     2 

"     11 

"     16 

"     21 

"     26 

"     31 

February   ...  5 

10 

"     .15 

"  ....■  ...20 
"     25 

March    2 

"     7 

"     12 

"     17 

"     22 

"     27 

April    1 

"     6 

"     11 

"     16 

"     21 

"     26 

May    1 

•*     6 

"     11 

•*     16 

"     21 

"     26 

*•     31 

June 5 

"     10 

"     15 

"     20 

"     25 

"     30 

July    5 

•' 10 

"     15 

"     20 

"     25 

"     30 

August  4 

"     .'.'.'. '.'.'.'.U 

"     19 

"     24 

"     29 

September  ••  3 

"  '.'.'.'.  .'.'.'.13 

"  23 

'*  28 

October 3 

"  8 

'*  13 

*•  18 

"  23 

••  28 

November   • .  2 

"  7 

*'  12 

••  17 

•'  22 

"  27 

December  ...  2 

"  7 

"  12 

"  17 

"  22 

"  27 

•'  31 


Mares. 

340  Days. 

Date  of  Birth. 

December  ...  6 

"     11 

"     16 

"     21 

"       26 

"     31 

January   5 

"     10 

"     15 

"     20 

"     25 

"     30 

February  ...  4 

'*     9 

"     14 

"     19 

"     24 

March    1 

"     6 

"     11 

*•     16 

"     21 

"     26 

"     31 

April    5 

"      10 

"     15 

"     20 

"     25 

"     30 

May    5 

'*     10 

"     15 

"    20 

"     25 

"     30 

June 4 

"     9 

"     14 

"     19 

"     24 

"     29 

July    9 

'"    14 

"  ...?.. ..19 

"     24 

"     29 

Aujrust  3 

•'     '.'.'.'.   "...13 

"     18 

*•     23 

"     28 

September  ..  2 

"     '.'.'.'.'.'.'.'.12 

"     17 

•     22 

"     27 

October 2 

"     7 

"     12 

"     17 

**     22 

"     27 

November    ..  1 

"     6 

"     11 

"     16 

"     21 

"     26 

December  ...  1 
"     5 


Cows. 

283  Days. 

Date  of   Birth, 

October 10 

"       15 

"       20 

"     25 

"     30 

November   • .  4 

"     9 

"     14 

"     19 

"     24 

*'     29 

December  •  • .  4 

"     9 

"     14 

"     19 

"     24 

"     29 

Jan  uary   3 

"     8 

"     13 

"     18 

"     23 

"     28 

February  ...  2 

"     7 

"     12 

"     17 

"     22 

"     27 

March    4 

"     9 

**     14 

•*     19 

'*     24 

"     29 

April    3 

"     8 

"     13 

"     18 

"     23 

"     28 

May    3 

"     8 

"     13 

"     18 

"     23 

"     28 

June 2 

"     7 

"     12 

"     17 

"     22 

"     27 

July    2 

"     7 

"     12 

"     17 

•'     22 

•*     27 

August  1 

*^    6 

"     11 

"     16 

"     21 

"     26 

"     Al 

September  ..  5 

"     '.'.'.'.  .'.'..15 

"     20 

"      25 

"     30 

October    5 


Ewes. 

150  Days. 

Date  of  Birth. 

May    30 

June  4 

"     9 

"     14 

"     19 

"     24 

"     29 

July    4 

"     9 

"     14 

"     19 

"     24 

"     29 

August  3 

••  '.'.'.'.'.'.'.'.13 

"     18 

"     23 

"     28 

September  ..  2 

"     7 

"     12 

"     17 

'*     22 

"     27 

October 2 

••     7 

"     12 

"     17 

"     22 

"     27 

November  ..  1 

'*     6 

"     11 

"     16 

"     21 

"     26 

December    ..  1 

"     6 

"     11 

"     16 

"     21 

"     26 

'•     31 

January    5 

"     10 

"     15 

"     20 

"     25 

"     30 

February  ...  4 

"     9 

"     14 

"     19 

"     24 

March    1 

"     6 

"     11 

"     16 

"     21 

"     26 

"     31 

April    5 

"     10 

•     15 

"     20 

"     25 

"     30 

May    5 

"     10 

"     15 

"     20 

"     25 


Sows. 

112  Days. 

Date  of  Birth. 

April    22 

"     27 

May    2 

"     7 

"     12 

"     17 

"     22 

"     27 

June 1 

" 6 

"     11 

"     16 

■•     21 

."     26 

July    1 

"     6 

"     11 

"     16 

"     21 

"     26 

"     31 

August 5 

'^    10 

"     15 

"     20 

"     25 

"     30 

September  ..  4 

"     '.'.'.'. '.'.'.'.U 

"     19 

"     24 

"     29 

October 4 

"     9 

"     14 

"     19 

*'     24 

"     29 

November   . .  3 

'*     8 

"     13 

"     18 

"     23 

"     28 

December    ••  3 

"     8 

"     13 

"     18 

"     23 

"     28 

January    2 

•'     7 

"     12 

"     17 

" 22 

"     27 

February   • .  •  1 

"     6 

••     11 

'•     16 

"     21 

"     26 

March    3 

"     8 

'*     13 

"     23 

"     28 

April 2 

"     7 

"     12 

"     17 

"     21 


USEFUL  TABLES  159 

Ho^w  to  Find  the  ^Number  of  Tons  in  a  Hay  Stack. 

A  fairly  accurate  rule  is  as  follows:  Subtract  the  width 
from  the  over  (the  "over"  is  the  distance  from  the  ground  on 
one  side  over  the  stack  to  the  ground  on  the  other  side), 
divide  by  two,  and  multiply  by  the  width,  and  then  by  the 
length.  We  have  now  found  the  number  of  cubic  feet  in  the 
stack.  To  find  the  number  of  tons,  proceed  as  follows:  For 
a  stack  twenty  days  old,  or  under,  divide  by  512;  between 
twenty  and  sixty  days  old,  divide  by  422 ;  over  sixty  days  old, 
divide  by  380. 

A  more  accurate  rule  for  finding  the  number  of  cubic  feet 
is  as  follows:  Subtract  the  width  from  the  over;  divide  by 
the  height,  then  multiply  successively  by  the  over,  the  width, 
the  length,  and  by  .225.     The  tons  are  then  found  as  above. 


INDEX 


Page 


Accounts, 

Value  of, 

37 

Farm,  Difficulties  of. 

9 

Household, 

56,  60,  62 

Personal, 

21,  22,  23 

Shop, 

66 

Agriculture,  Statistics  of,  110 

Articles  of  Incorporation,  119 

Balance  Sheet,  47,  48 

Bank  Account, 

Explained,  25 

Illustrated,  26 

Bill  and  Receipt  File, 

Explained,  14 

Illustrated,  16,  24 

Blank  Books,  2 

Bookkeeping, 

Difficulties  of  Farm,  9 

Importance  of,  8 

Breeding  Record,  103 

Business  Forms,  141 

Business  Letter,  The,  123 

Business  Organizations,  115 

By-Laws,  Form  of,  119 

Cash  Books,  19,  44 

Explained,  13,  39 

Illustrated,  44,  60 

Certificate  of  Deposit,  146 

Check,  The,  144 

Closing  the  Ledger,  82,  86 

Commercial  Accounting,  70 

Copartnership,  Articles,  116 

Corporations,  117 

Cost  of  Production,  91 

Of  Crops,  96 

Of  Live  Stock,  92 

Dairy  Herd,  Test  of,  93 

Day  Book, 

Explained,  13 

Illustrated,  10,  18 

Deposit,  Certificate  of,  145 

Depreciation,  14 

Double  Entry, 

Books  Needed,  38,  70 

Compared  with  Single,  38 

Superiority  of,  37 

Draft,  The,  144 

Equipment,  39 

Exchange  Phase,  Importance  of,      8 

Farming,  A  Paying  Business,  8 

Feed  Record,  103,  107 

File,  Letter  and  Bill,  16,  24 

Hay,  How  to  Measure,  159 

History  of  the  Farm,  13 

Household  Accounts,  56,  60,  62 

Home  Study,  28,  161 


Improvements, 

Pa«e 
39 

Introductory, 

7 

Inventory, 

Explained, 

14 

Illustrated, 

17,  18,  20 

Continued, 

17,25 

Investment,  The, 

109 

Invoice, 

141 

Joint  Stock  Companies 

1,                   117 

Journalizing, 

73,  75,  76,  78 

Labor  Records, 

98,  102,  108 

Labor  Report, 

101 

Ledger, 

41,70 

Original  Entry, 

87 

Lessons,                 29, 

43,  58,  76,  106 

(See  also  page  161) 

Closing,  20,  86 

Lessons,  Illustrative, 

29,  43,  58,  76,  106 
Live  Stock,  Cost  of  Production, 

92,  97 
Methods  of  Bookkeeping, 

10,  12,  36,  69 
Milk  Records,  98,  102,  106 

Note,  The  Promissory,  143 

Office  Methods,  100 

Organizations,  115 

Partnership,  115 

Personal  Accounts,  21,  22,  23 

Phases  of  Farming,  8 

Plot,  The  Farm,  99,  105,  109 

Poultry  Records,  98 

Practice  Work,         29,  43,  58,  76,  106 
Posting,  74,  81,  82 

Profit  and  Loss  Statement,        47,  48 
Profits,  How  to  Determine,  15 

Prosperity  of  the  Farmer,  7 

Questions,  Review,  67 

Rates  of  Depreciation,  14 

Receipt,  The,  142 

Records,    What  They   Should 

Show,  9 

Repairs,  39 

Sales  Book,  Duplicating,  104 

Shop  Accounts,  66 

Single  Entry,  13 

Special  Records,  98 

Statement,  The,  142 

Financial,  18,  20,  47,  48,  84 

Success,  Causes  of,  7 

Supplies,  39 

Tables,  Useful,  149 

Terms  and  Definitions,  71 

Time  Book,  10,  104 

Trial  Balance,  40,  57,  84 

Voucher  Check,  147 


(160) 


INDEX  TO  THE  HOME-STUDY  COURSE 

The  Home-Study  Course  in  Farm  Accounting  and  Business 
Methods  comprises  fifteen  assignments  as  follows:  — 

Blank 

Assign-  Form 

ment           Lesson  ISo.              Page 

I.  1        The  Inventory 1*  29 

2        The  Day  Book  and  Cash  Book 1  30 

II.  3        Personal  Accounts 1  31 

4  Statement  No.  2 1  33 

5  The  Bank  Account 1  34 

III.  6        Cash  Receipts,  Set  1  (Also  Form  14) . .  2  43 

7  Cash  Payments,  Set  1  (Also  Form  15)  3  48 

8  Statement  No.  3 12  50 

IV.  9        Cash  Receipts,  Set  2    (Also  Form  14)  2  51 
10        Cash  Payments,  Set  2  (Also  Form  15)  3  52 

V.  12        Household    Accounts,     Set    1     (Also 

Forms  16  and  17) 4  and  5  58 

13  Household    Accounts,     Set    2     (Also 

Forms  16  and  17) 4  and  5  59 

VI.  11        Statement  No.  4 12  and  13  54 

14  Continued  Inventory 1  64 

VII.  22        Milk  Record 10  1C6 

23        Feed  Record 9  107 

VIII.  24        Labor  Record 6  108 

25        Farm  Plot :  11  109 

IX.  .  16        Journalizing 1  76 

17        Posting 20**  81 

X.  18        Trial  Balance 1  84 

19  Balance  Sheet 1  84 

20  Closing  the  Ledger 20  86 

XI.  26        Partnership    and    Joint    Stock     Co., 

Exercises  1  and  2 117 

27        Corporations,  Exercise  3 122 

XII.  28        Arrangement  of  a  Business    Letter, 

Exercises  4  and  5 129,  131 

30        Addresses  and  Inclosures,  Exercise  7  140 

XIII.  29        The  Business  Letter,  Exercise  6 136 

XIV.  31        Business  Forms,  Exercises  8  and  9  . . .  141,  142 
32        Negotiable      Instruments,     Exercises 

10  to  14 143-147 

XV.  Final  Review  and  Test. 


*  Two  or  three  column  journal  paper. 
**  Common  ledger  paper. 


(161) 


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